Abstract
Life expectancy has been rapidly increasing and remains uncertain in all OECD countries, including Poland. One of the many economic and social consequences of this process is the increase of the longevity risk in social security systems. The article focuses on the issues of managing longevity risk in the pension system in Poland, in particular—the construction of public and supplementary pension systems and its ability to adapt to the challenges associated with longevity risk. The starting point for further consideration is defining individual, aggregate and total longevity risks in a pension system. Next section of the article presents the current design of the Polish pension system. On this basis, in the third part of the article, the exposure of Polish pension system to the risk of longevity has been analyzed. Particular attention has been paid to the analysis of public structures and supplementary pension schemes in the phase of payment of benefits (decumulation). The author argues that the institutional design of the payout phase of Polish pension system does not include instruments which could guarantee adequate protection against the risk of longevity. While in the public retirement system the aggregate longevity risk (mortality trend risk) exists, the participants of additional pension systems are exposed to individual longevity risk (the risk of outliving their additional pension savings). The limitation of these risks requires significant structural changes both in public and additional pension schemes in Poland.
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Notes
- 1.
The new Polish president Andrzej Duda promised in his election campaign in 2015 to restore the previously existing statutory retirement age (65 for men and 60 for women). Making this change by the ruling of Law and Justice Party in 2016 is quite likely. It would be another significant change of the rules of the introduced pension reforms in Poland.
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Article prepared within the statutory research at the Faculty of Management Engineering of Poznań University of Technology.
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Szczepański, M. (2017). Managing Longevity Risk in Pension System: The Case Study of Poland. In: Bilgin, M., Danis, H., Demir, E., Can, U. (eds) Country Experiences in Economic Development, Management and Entrepreneurship. Eurasian Studies in Business and Economics, vol 5. Springer, Cham. https://doi.org/10.1007/978-3-319-46319-3_44
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