The Polish government has approved a new bill to dismantle state-guaranteed private pension funds and move assets accumulated in them to individual retirement accounts.
According to the bill, PLN 162 billion (EUR 38 billion) worth of assets managed by private pension funds (OFE) will be transferred to individual retirement accounts (IKE) in a massive operation scheduled to take place next year.
The move is expected to help build a stable pension system and increase the long-term savings of the population, officials explained.
A one-off tax of 15 percent will be withheld on all assets transferred to individual retirement accounts.
Prospective pensioners will be able to request transfers to the state-owned social insurance institution (ZUS) instead. Then no transfer tax will be collected, but pensions are subject to income tax.
The reform is expected to take effect on June 1. This marks a change from a previous government proposal that had January 1 as the starting date for the reform.
Earlier this year Poland launched a new system of voluntary, employer-sponsored pension plans (PPK) to offer a new option for employees to save money for retirement.
