Gov't to reform OFE pension funds

Development Ministry and Deputy Prime Minister Mateusz Morawiecki announced on Monday that Poland would like to transfer 75 percent of assets kept in private pension OFE funds to the voluntary capital pillar and the remaining 25 percent to the demographic reserve fund (FRD). Morawiecki said that initial assumptions to the reform of pension funds stipulate "the transfer of OFE means to individual pension accounts of their users as well as [allocating them] to 'new important ventures that will build the power of our economic policy.'" OFE pension funds will be transformed into Polish equity investment funds and PLN 103 billion, constituting 75 percent of their assets, will be transferred to IKE individual pension accounts. "Our intention is that assets are still managed by funds but not by open funds, only by investment funds," Morawiecki said. "There haven't been any plans to nationalize OFE, but we have a good plan how to build Polish capital. The plan is to give the money to Poles " the official reassured. The overhaul of the OFE funds would be a part of a program aimed at increasing savings that is expected to boost GDP growth by 0.4 percent, the deputy Prime Minister said. The remaining 25 percent of OFE's assets (PLN 35 billion) will be transferred to a demographic reserve fund in order strengthen the pension system's financial buffer. The means could be used in the future to secure co-financing of pensions of current OFE participants. On Saturday, chairman of the ruling party, Jarosław Kaczyński, said at the PiS congress that the government needs to come up with new proposals about what to do with the money left in OFE, "which today is in fact losing value...And it could be the basis of new, important ventures which will build the strength of our economic policy but they will also support millions of Polish households."