10:10 4 July 2020
Post by: WBJ

Polish Open Pension Funds worst in world in terms of investments

Polish Open Pension Funds worst in world in terms of investments
Source: Pxhere

Polish and Czech pension funds as the only ones in OECD countries suffered losses on their investments. The OECD report - the club of the richest countries in the world to which Poland also belongs - shows that Polish Open Pension Funds (OFEs) lost a total of 2.7 percent last year.

The best investing funds were from Lithuania, Belgium and the Netherlands earning respectively 16.6 percent, 15.6 percent and 13.8 percent

Experts point out that such a poor result is not entirely the fault of fund managers, but regulations that severely limit the freedom to shape their investment policy in Poland

Our OFEs now suffer particularly from restrictions on investing in bonds, and in addition this dependence on the stock market is limited to a large extent to the Polish stock exchange. The one in 2019 was doing poorly, as it has been for many years: the WIG20 index dropped by -5.56%, and the WIG index increased by only 0.25%.

Moreover, due to a worldwide pandemic, asset value projections are not optimistic. The OECD report shows that the assets of pension funds at the end of the first quarter of 2020 could have fallen to USD 29.8 trillion, when in 2019 their value was USD 32.2 trillion.

In Poland, these unprofitable OFEs will probably be liquidated in 2021. Unless they embezzle everything, the funds accumulated on them will be transferred to Individual Retirement Accounts.

Employee Capital Plans will be created, from which it will be possible to unsubscribe and which will have greater investment freedom, thanks to which they will be more independent of our stock exchange.


pension funds

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