POLAND - Agnieszka Chlon-Dominczak has been nominated as vice-minister at the ministry of labour and social policy in charge of pensions.

Her nomination brings to an end a period of uncertainty over the pensions policy to be pursued by the government formed after last October's general election.

A failure by previous administrations to address key issues has left the Polish private pensions industry with a growing backlog of matters requiring urgent attention.

Pensions industry sources were concerned while the new prime minister, Donald Tusk of the liberal Civic Platform (PO) party, had appointed a minister of labour and social policy and several deputy ministers to head up the ministry's several policy areas, there had been no nomination to oversee pensions.

"There are a number of urgent issues that need to be addressed," Chlon told IPE. "The first is that the first pensions paid from the funded system will be paid out in 2009."

The private mandatory pension system was introduced in 1999 but there is still no law on annuities.

The previous conservative government had drafted proposals which foresaw the creation of private specialised annuity companies. However, it failed to consult the industry on the plans and no legislation was tabled before the election.

"Among the questions [to be considered] are whether there is sufficient time to create separate institutions and how much would it cost," said Chlon. "In addition, we have to take that into account that there would be start-up costs associated with establishing these companies and at the end of the day they would be charged to the participants of the system. So we need consultations with and feedback from the market."

The government's delay in filling the vice-ministerial role was a cause of concern to industry players both because of the urgency of the need to prepare for the payout phase and for the message it sent about the government's willingness to continue the reform.

"We need detailed rules on what, how and who will eventually pay out of the capital accumulated in individual accounts," says Marek Gora, a professor at the Warsaw School of Economics and one of the fathers of Poland's pension reform. "And the providers will have to know in advance whether they will play a role - they will have to be licensed, they will have to prepare their infrastructure. I think there is still enough time but only if we give this legislation absolute priority. It should be passed by parliament, signed by the president and all procedural issues completed by March at the latest."

Chlon was formerly director of the department of economic analysis and forecasting at the ministry.

In addition, Artur Kluczny has been named vice-chairman of the Polish Financial Supervision Authority (KNF) with responsibility for pensions and securities.

He replaces Iwona Duda, who was dismissed by Tusk last month. Duda had been criticised by the pensions industry for imposing an overly-bureaucratic approach that retained investment restrictions seen as increasingly outdated and for hindering attempts to consolidate the industry. (See earlier IPE story: Prime minister sacks Polish pensions supervisor).

Kluczny was formerly head of the secretariat at the prime minister's chancellery.

Topics