Investment managers such as Aviva, ING and Axa risk being stripped of assets in a mooted dismantling of Poland's private pension system.
The potential quasi-nationalisation of Poland’s 280 billion zloty second-pillar open pension funds (OFE) system has also raised fears of a mass sell-off in Polish equities. The 111 billion zlotys of equities held by OFEs account for almost 40 per cent of the free float of the Warsaw stock exchange, according to Lombard Street Research. “We are very concerned about these developments. People in Europe [should] have good pensions and if this happens it will be harder to achieve”, said Matti Leppälä, chief executive of PensionsEurope, an umbrella group for national pension associations. He also feared the move could reduce the value of second-pillar pensions by 10-40 per cent.
The Polish government has presented three options for reform of OFEs, which have 15.9 million members. One option would involve transferring the Polish government bonds held by OFEs into the state pension system and barring OFEs from reinvesting in sovereign debt. However, most observers believe the government will plump for one of the other options; requiring members to file a declaration saying they want to remain with OFEs, or otherwise see their assets automatically transferred to the state system; or giving people the right to stay with OFEs, but only if they pay an extra levy of 2 per cent of their gross wages.
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