|
|
 |
Call for change to Polish pension
system
IPE.com 10/Jan/03: POLAND – A researcher at the
Warsaw School of Economics has called for “fundamental
changes” to be made to Poland’s 7.6 billion dollar
pensions system.
Dariusz Stanko suggests the
changes to the system in a paper entitled “Polish
Pension Funds, Does The System Work? Cost, Efficiency
and Performance Measurement Issues”, a working paper
published by the Pensions Institute.
He says the
fee structure should be revamped to create “better
motivation for active management” and that investment
limits should be reconsidered to allow for
diversification and higher long-term risk to overcome
low capacity on the Warsaw stock exchange.
“During the last three years,” Stanko notes,
“the system’s rate of return was much lower than the
rate of inflation.” He says the skills of the investment
managers were not in question. “Therefore it is the
design of the system and its operational costs that
contribute to low efficiency.”
“This paper backs
the performance-related fee framework and proposes the
external benchmark as a target for the pension
managers.”
Stanko notes that at the end of 2002
there were 17 active pension administrators in Poland,
managing 17 public pension funds. That number will fall
to 16 in February when the Ego fund is taken over by
Skarbiec. He foresees further consolidation as the
smaller funds are squeezed out.
Stanko’s own
research puts the size of the accumulated assets of the
funds at 30.4 billion zlotys (around 7.6 billion
dollars). He says this represents 26.8% of the total
capitalisation of the Warsaw exchange and 4.2% of
Poland’s 2001 gross domestic product.
He
identified problems in the system, such as an incomplete
computer system, dead accounts and the high
concentration of pension investments in stocks.
By Daniel
Brooksbank
Email
this article to a colleague
Register for
daily IPE.com News alerts free of charge
 © IPE International Publishers Limited –
all rights reserved. | |
|
|
© IPE International Publishers Limited | Conditions
