Warsaw - Poland wants to reduce its deficit by reducing payments to private pension funds while keeping that money in the state's social insurance company ZUS, the Finance Ministry said Wednesday. Under the proposal, private pension funds would receive some 3 per cent of worker salaries instead of the current 7.3 per cent, a change amounting to a difference of some 13 billion zloty annually (4.4 billion dollars).
The state would gain, Finance Minister Jacek Rostowski told the Wyborcza daily, because it will not have to fall "deeper into debt."
Private pension funds under the proposal would get 9 billion zloty annually instead of 22 billion.
The proposal was "creative bookkeeping" that would undermine trust in the country's retirement system, Marek Gora of the Warsaw School of Economics told the daily.
Smaller private pension funds could disappear off the market when their funds are lowered, the daily cited Ewa Lewicka, head of the Chamber of Commerce of Retirement Associations, as saying.
