Several experts in Poland have condemned as unrealistic a proposal to invest pension contributions in infrastructure. It was tabled by the labour minister, Jolanta Fedak.
The minister recently said that Polish pension funds should allocate more to road projects in the country and therefore reduce their exposure to the fluctuation of stock markets. According to Fedak, investments in such infrastructure projects would deliver higher and more secure returns.
The comments were described as unrealistic by several Polish experts, who claimed they were made for pure political purposes and who argued that pension funds' allocation to capital markets has provided satisfying returns over the past months. Andrzej Narkiewicv, principal in charge of the pension advisory services at Mercer, said: "We cannot predict at this stage whether or not investments in infrastructure will provide sustainable returns, as the boom in infrastructure projects previously predicted has not yet been recorded. Polish pension schemes have invested as much as PLN3 billion (€717.1 million) in equities over the last weeks, taking advantage of low prices, at a time when the Polish capital market is providing higher returns than the returns currently recorded in other European countries."
In January, the Polish government reiterated plans to introduce lifecycle funds in the second pillar that would see higher equity quotas in funds for younger employees, while older Polish workers would have the option to shift gradually their investments toward less risk assets such as bonds as they approach the legal retirement age.
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