New pension proposals bad for OAPs

24th July 2010

© kamshots, wikipedia.org OAPs will be hit if new plans go ahead Share:

The government is on a collision course with OAPs over its controversial pension plans.

Labour minister Jolanta Fedak has said she wants to cut the amount people pay in pension contributions to Personal Pension Schemes from 7.3 percent of their salary to 3 percent and instead increase the amount of contributions paid to ZUS - the state-funded pension. The main reasoning behind the move is to help reduce public debt and the budget deficit.

But although good for the budget, it isn’t good for OAPs. If Fedak’s plan is given the green light, it will mean pensioners receive three times less upon retirement than they do at the moment.

Pensioners are also unhappy with PM Tusk who in January said: “For the time being we will not talk about shifting a substantial part of contributions to ZUS. This topic is closed.”

However, Deputy Prime Minister and Economy Minister Waldemar Pawlak sees the future of pensions in a different light, suggesting that everyone pays a small contribution to ZUS and in return everyone would receive the same, low pension. People who wanted to bolster this, could do so by the use of private savings or investment funds.

With so many different ideas being bandied around, Pawlak has even proposed holding a referendum on the issue, allowing the public to have their say in how the future pension scheme would work.

“This would be an extreme strange way of doing things,” says Victor Wojciechowski, an economist at the FOR foundation. “What would happen next - a referendum over tax increase?”