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Poland's pension reform to boost capital market, stock exchange, state fund says


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Poland's pension reform to boost capital market, stock exchange, state fund says

Poland's development fund PFR expects that the country's new pension scheme, recently approved by the government, could stimulate the development of the local capital market and the Warsaw Stock Exchange, or Gielda Papierów Wartosciowych w Warszawie SA, Reuters reported Aug. 29.

The implementation of the new employees capital pension scheme, to be introduced from January 2019, is expected to give "a strong stimulus to the development of the Warsaw Stock Exchange as a real financial center in our region of Europe," the PFR was cited as saying.

The fund also estimates that the impact of savings accumulated in the pension scheme on the Polish capital market could amount to at least 12 billion Polish zlotys per year.

Under the new scheme, employees will be able to voluntarily pay between 2% and 4% to the pension system, in addition to their obligatory monthly payments, and employers will contribute up to 4% of the employee's salary, with the contributions to be managed by private asset management companies.

The Warsaw Stock Exchange, which is the biggest bourse in central and eastern Europe, suffered from an outflow of investors in 2013, after the previous government took control of private pension funds' bond holdings to reduce public debt, and some policies implemented by the currently ruling PiS party, which came to power in 2015, further contributed to investors' uneasiness, Reuters noted.

As of Aug. 29, US$1 was equivalent to 3.67 Polish zlotys.