Already over 6% of retirees without minimum pension

The Federation of Polish Entrepreneurs (FPP) indicates that the latest ZUS data on the structure of the number of pensions after the indexation carried out in March 2021 shows that as many as 365,000 persons received a pension in an amount lower than the applicable minimum pension (PLN 1,250.88 gross). These people constitute 6.1 percent of the total number of retirees in Poland. For comparison, in March 2020, the retirement pension below the minimum received 333,000 people, which means an increase of 32,000 during the year. However, 10 years ago, the problem of lower minimum pensions concerned only 24,000 people. Since 2011, the number of pensioners without the statutory guaranteed amount of benefits has increased 15 times.

Pensions below the minimum are granted to people who have not developed sufficient capital, and at the same time, their contribution period is shorter than 20 years for women or 25 years for men. This is the situation of people who were economically inactive for most of their lives or worked in the shadow economy, but the problem is not limited to these two groups.

“The increase in the number of people deprived of the right to a minimum pension is also the result of the abuse of unfunded contracts of mandate. For many years, this trend was driven by the public procurement system – under which contracting authorities expected a maximum reduction in the price for the services purchased, forcing savings also on social security contributions for the contractor's employees. Hence the popularity of the use of coincidental insurance titles, thanks to which it was possible to pay premiums only from the first contract. Until 2016, there was not even any lower limit on the value of the first contract that would exempt from paying premiums for subsequent contracts,” Łukasz Kozłowski, chief economist of the Federation of Polish Entrepreneurs, vice president of the CALPE Legislative Analysis and Economic Policy Center, emphasized.

(WBJ)