The Polish government has recently notified of its plan to transfer all the assets accumulated in the privately managed part of the pension system known as OFEs (ca. EUR 38 billion) to individual pension accounts (IKEs). The changes are initially scheduled for 2020.
According to the government, the main objective of the reform is to make funds collected in the OFEs private and heritable (please note that Polish Constitutional Tribunal in its judgement of 4 November 2015 has ruled that funds accumulated in OFEs are public funds, not private savings of the insureds).
Importantly, the transfer of funds to an IKE will be subject to a “conversion” fee of 15% of the total assets accumulated in the OFEs. The payment of the fee is to be made in parts over two years (2020 and 2021, respectively) and forwarded to the Social Security Fund run by the state. Saving in the IKEs is to be voluntary – OFEs’ members will have the option to transfer their entire funds to the state-owned Polish Social Insurance Institution (in this case the “conversion” fee will not be charged).
In addition, pension fund management companies that run OFEs are to be converted into investment fund companies.
The Polish Financial Supervision Authority has reacted positively to the planned changes.