In Warsaw, they decided that it would be better for the economy if older people started freeing up jobs for young people faster.
In those countries where mandatory funded and voluntary funded systems were already prevalent, raising the retirement age is necessary to maintain the workforce's presence in the economy. Simply put, due to falling birth rates, there are fewer young people and a shortage of workers. And solving the problem by letting in migrants is not desirable.
As noted by IA "Rosbalt", in many states (Russia, Belarus, Latvia, Lithuania, Estonia, France, Denmark, Brazil, Australia) legislators have taken the path of increasing the retirement age. But in other countries (Italy, Poland, China), the retirement age is being lowered instead. They have their own considerations.
For example, in Italy, they want to reduce youth unemployment this way – so that older people do not linger in jobs but go on state welfare. In China, they are trying to simply speed up the turnover of labor against the backdrop of economic stagnation: the economy no longer needs all available workers, but it does need young ones. In Poland, they want to "stimulate" the economy as a whole.
One of the main problems of the rapidly growing Polish economy in the last decade is a shortage of workers. But at the same time, the Polish government is formed by the ruling right-wing conservative party "Law and Justice." That is, it opposes allowing non-Christian migrants, as well as refugees from Africa and the Middle East, into the country. Moreover, on this issue, Warsaw is even in open conflict with Brussels.
The fact is that the Polish government has found a unique solution to the labor shortage – it actively attracts labor migrants from Ukraine and Belarus. According to most estimates, there are already about two million of them there. Warsaw is satisfied: language difficulties are minimal, and cultural and religious ones are nonexistent. It turns out that Poland's own youth can be employed in higher and more "intellectual" positions, especially since jobs requiring manual labor (and many more complex ones too) are already "covered" by Ukrainians and Belarusians.
Therefore, the Polish government decided that if older citizens are allowed to retire earlier, Polish youth will be able to climb the career ladder faster. And the new technologies and approaches they bring will give a new impetus to the country's development.
On October 1, 2017, a law on lowering the retirement age came into effect in Poland. According to it, men can retire at 65, and women at 60. Previously, the retirement age for both sexes was 67.
"The Polish government gives Poles the right to choose. If someone wants to work longer, they can do so. By lowering the retirement age to 60 for women and 65 for men, we are returning a dignified choice to our compatriots," said then-Polish Prime Minister Beata Szydło. According to her, the state budget has funds, so the Social Insurance Fund (ZUS) of Poland is not at risk of bankruptcy; it has enough funds to cover growing pension payments.
At the time of the new law's adoption, 82% of Poles planned to take advantage of the right to earlier retirement – according to data from the Social Insurance Fund (ZUS). And then experts accurately predicted that this trend would only strengthen further.
The reason is that the sum of preliminary contributions is divided by the average life expectancy. Accordingly, when life expectancy increases, the pension amount decreases. This means that more and more people, regardless of how long they work, will receive the minimum pension. In such a situation, it is beneficial for an ordinary worker to stop working earlier and receive supplements to the minimum pension from the budget.
Lowering the retirement age was one of the election promises of the Law and Justice party (PiS), which won the parliamentary elections in October 2015. The Polish Sejm voted for this law on November 16, 2016. For the remainder of 2017, 1 billion zlotys (240 million euros) were spent on implementing the law. In 2018, 10 billion zlotys (over 2.3 billion euros) were already spent on pension provision. That year, about 330,000 people retired in Poland. Moreover, in 2020, it is planned to consider a further reduction of the retirement age. However, under the new rules, Poles have the right to work even after reaching retirement age. Each additional year of work means an increase in the pension.
Now about money. The average pension in Poland is approximately 40% of the average salary. Full pension benefits are paid after 40 years of work experience, but men can retire after 20 years of work if they wish, and women after 15 years. Thus, the majority of pensioners receive from 1,500 to 2,000 zlotys, that is, about 350-470 euros. Not too much by European standards, it seems, but life here is quite cheap – in a good sense.
ZUS is considered the pension insurance management service. This fund is also responsible for state health insurance and other types of personal insurance. All working citizens and legal immigrants are required to pay pension contributions to ZUS. They are divided into several categories: actually, for the pension – 19% of salary; for disability insurance – 8% of earnings; for medical care – about 3%, etc. Such a rather complex insurance system covers many aspects of citizens' lives, allowing them to remain socially protected in case of loss of ability to work or upon retirement.
And on October 4, 2018, the Polish Sejm adopted a law on planned capital investments for employees. It provides for the creation of a private and voluntary system of additional savings for the retirement period. The state, employers, and employees must participate in the implementation of the program.
According to Marcin Horała, a deputy from Law and Justice, the new law has advantages: "First, the new law is a response to Poland's demographic problem. It's about the fact that the ratio between pensioners and workers will increase in the near future, which is why we need additional sources of funding for pensioners so that they don't end up too low. The new law provides for voluntariness; no one will be forced to participate in this program. If a person wants to, they can take advantage of an additional offer to increase their savings for retirement."
The specific amount of a pension in Poland is calculated using a complex formula based on the legally established average life expectancy of a person and the sum of their pension contributions. The pension is then indexed for inflation. In the event of the recipient's death, their relatives are entitled to a one-time guaranteed payment.
Since Poland tries very hard (in certain respects) to comply with EU standards, pensioners are also taken care of additionally. On certain days, stores of all retail chains hold sales of food and various goods at reduced prices for them. Local authorities organize free excursions and events, and create interest clubs. And, of course, the Catholic Church does not leave pensioners without attention – after all, they are perhaps the most conscientious parishioners.
Notably, in 2017, the European Commission (the EU government) severely criticized Poland for its decision to lower the retirement age. In response, in Warsaw, the Solidarity trade union staged a protest outside the European Commission's office building over interference in Polish affairs.