Ignoring warnings that it could deter foreign investment, the Polish government has announced a draft bill that would require private pension funds to transfer about 35.2 billion euros, or $47.6 billion, in government bonds to the state in February. Critics have likened the move to a Soviet-style nationalization of private assets, or an asset seizure. http://www.nytimes.com/2013/10/12/business/international/polish-bill-would-transfer-pensions-to-state.html?ref=world
The Civil Development Forum, a foundation established by Leszek Balcerowicz, a respected former finance minister credited with liberalizing the Polish economy after the fall of communism in 1989, called the government’s bill “an easy heist of Polish pensioners’ funds.”
Most of the private funds are owned by big foreign money managers, including ING, Aviva, Allianz and Generali. Altogether, the private funds hold assets worth about 68 billion euros, or more than one-fifth of Poland’s gross domestic product.
The Polish government, which has faced public dissent over austerity measures, faces an election in 2015, and analysts say the changes are part of a move aimed at improving its financial breathing room to borrow and spend.
Under the changes, the government plans to cancel the bonds, which will reduce the government’s debt by around eight percentage points. Pensioners would receive a financial commitment from the state equivalent to their transferred assets.
Privately managed funds in Poland have indicated they are considering a legal challenge to the bill in the country’s constitutional court.