Saturday, July 2, 2016

The aging population and pension reform will be a disaster for the Polish budget – Money.pl

According to the S & amp; P Global Ratings, in connection with the planned by the government back to a lower retirement age and aging , Polish public finances is waiting to collapse. Without appropriate fiscal reforms structural debt of our country can rise to the level of 140 percent of GDP in 2050.

The agency estimates that by 2050 the number of Polish population will fall by 10 percent. This means that we will be less by almost 4 million. Systematically increase will be the number of older people, which in the mid-century will be about 15 percentage points, and their total number will reach 30 percent of the general public.

About 14 percentage points fall the number of people of working age from 71 percent currently to 57 percent in 2050, which will almost double the dependency ratio.

Expenditure relating to the pension system will rise during this period from 16.4 percent of GDP in 2015 to 17.3 percent in 2050, assuming no changes in the pension system and government policy. As you can see the improvement of the condition of the Polish economy only partially offset the high costs associated with retirement.

Another threat is the pension reform planned by the current government. PiS wants to return to the previous retirement age of 60 years for women and 65 for men. It is currently 67 for men and women. In practice, however, it is lower, as in the case of men will be reached in 2020 and for women by 2040.

The negative effects of the reform will not be seen right away. The aging population will make the spending on maintenance of older people will increase. S & amp; P Global Ratings in the report estimates that if the retirement age will be lowered without carrying out structural and fiscal reforms in the country, the Polish debt to triple by 2050, reaching 140 percent of GDP.

The situation of pensioners can also improve started by the previous government disassembly of the second pension pillar, on which the funds are collected in the Open pension funds.

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