Civil Development Forum about lowering the retirement age

In the past, the Civil Development Forum has repeatedly spoken out against lowering the retirement age. We pointed out that shorter employment and longer time when pensions are collected will result in poverty-level pensions, higher taxation on employment, and slower economic growth. (FOR Communication of 20 July 2016: Lowering the retirement age: Losses for future retirees, workers, and the economy). Lowering the retirement age is contrary to the plan of Morawiecki, which rightly associates the decline in the number of people of working age with the slowdown in economic growth (13/2016 FOR Analysis: Power to the bureaucrats, that is the development of the plan by M. Morawiecki). The slower rate of catching up with the living standards of Western Europe will make young Poles, burdened with high taxes, continue to emigrate (FOR Communication of 8 Dec 2015: Reinstatement of the previous retirement age will push young Poles to emigrate).

Since 1999 the pension system has been based on the sound principle of - whatever you pay in, that much you pay out. Were this principle undermined, Poland would be on a straight course to the explosion of the debt retirement in the future and to a crisis in public finances.

Shorter time of saving for retirement will make our pensions lower. Already in 2018, as a result of lowering the retirement age, the workforce will decrease by 800 000. More people, especially women, will not be able to collect contributions in the sufficient amount and they will receive minimum pensions funded by general taxation. That means higher taxes in the future. The smaller number of employed and higher taxation will reflect negatively on the pace to catch up with the living standards of Western Europe, whereby young Poles will continue to emigrate. In this situation, the politicians will have strong incentives to dismantle the pension system further and to undermine its stability.

You are welcome to contact our experts:

Aleksander Łaszek - Chief Economist at FOR
aleksander.laszek@for.org.pl

Rafał Trzeciakowski - Economist at FOR
rafal.trzeciakowski@for.org.pl