The Polish pension reform

In the 1990s, Poland's government faced a serious crisis of the social security system. It decided to undertake a radical step and partially privatised the system in 1999. The objective was twofold. First, privatisation will gradually shift the burden from the state to the private sector. Second, the new pension funds will become major institutional investors and facilitate further growth of the capital market. This paper overviews the pension reform undertaken in Poland, compares it with reforms introduced in other countries, and provides preliminary data on the market performance of open pension funds. Polish experience can be of interest to other governments and institutions currently involved in, or considering privatisation of their social security systems.