Polish market regulator criticizes pension system overhaul
October 30, 2013
Poland's financial market regulator KNF took a broad-based and deeply critical swipe at the government's pending pension system overhaul, suggesting the bill is unconstitutional on several counts, a mistake for markets and pension savers and poorly written on a wide range of grounds.
The bill, which would appropriate 51.5% of AuM from private pension funds OFE, ban them from investing in Treasury securities and make further participation in the system optional, could violate constitutional rights for secure pensions and property rights, the KNF writes.
By banning future investments in Treasury papers by the funds, Poland could turn them into aggressive investment funds which not only underperform versus a classic pension portfolio, but in so doing, violate constitutional rights to stable pensions.
By appropriating the assets in the form proposed, Poland may also be violating constitutional rules on such property appropriations, authors say.