Pension Funds in Poland: Efficiency Analysis for Years 1999-2013

The reform of the pension system in Poland took place in 1999, when the one-pillar Pay-As-You-Go system (PAYG) was replaced by the three-pillars system consisting of two mandatory (PAYG and fully funded) pillars and voluntary (funded) one. However problems concerning budget deficit in Poland caused that the Polish government introduced significant changes in distribution of the pension contribution between both mandatory pillars and in the pension funds’ portfolio composition in 2011 and 2013. The aim of this study is to analyze the performance of the pension funds operating in Poland in the years 1999-2013. Applying Sharpe and Treynor ratios the study provides evidence that well diversified portfolio protects pensioners’ interest better than portfolios constructed due to the new rules.