Case Study 4 - Poland : Participation in Macroeconomic Policy Making and Reform
In January 1999, Poland launched a new pension system that was the result of 5-6 years of broad outreach campaigns and complex negotiations within the government and between the government and key stakeholder groups. A number of compromises were ma...
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| Format: | Brief |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2003/03/2864528/case-study-4-poland-participation-macroeconomic-policy-making-reform http://hdl.handle.net/10986/11317 |
| Summary: | In January 1999, Poland launched a new
pension system that was the result of 5-6 years of broad
outreach campaigns and complex negotiations within the
government and between the government and key stakeholder
groups. A number of compromises were made to broaden support
for the reform; these changes will significantly increase
costs during the transition period but without undermining
the long-term viability of the reformed pension system.
Post-communist Poland operated on a traditional
pay-as-you-go (PAYG) system; payroll taxes of current
workers financed the pension benefits of current retirees.
Due to a number of policy changes expanding early retirement
options and other privileges, pension costs skyrocketed in
the mid-1990s and Poland had one of the highest spending
rates of any post-communist transition country. In addition,
long-term demographic shifts led to a decline in people
paying into the system relative to those receiving benefits.
Contribution rates (i.e., payroll taxes) had already risen
from 25% in 1981 to 45% in 1990. They could not easily be
pushed up further. |
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