Polish government approves pension system shake-up

Reuters News
Posted: Apr 20, 2012 10:59 AM
Polish government approves pension system shake-up

WARSAW (Reuters) - Poland's centrist government approved a plan on Friday to gradually raise the retirement age and to reduce pension privileges for uniformed services.

The controversial reforms, which will need to be approved by the parliament and signed by the president, are part of a wider drive to put Poland's public finances on a more sustainable path ahead of a demographic shift towards a higher number of retirees, as elsewhere in Europe.

"From the perspective of Poland's security today and in the future, these are vital decisions," Prime Minister Donald Tusk told a news conference. "If we honestly compare them to decisions in other European Union nations, these are neither radical or overly cautions."

Tusk vowed to push through several structural reforms after winning an unprecedented second consecutive term last year, but was forced to water down the changes to the pension system after protests from his junior coalition partner.

Under the proposed plan, both men and women would eventually retire at 67 instead of 65 and 63, respectively. They will also be able to receive early partial pensions.

The government also wants its military, policemen and other uniformed services to retire after at least 25 years in service instead of the current 15 and to introduce a minimum retirement age of 55 years.

Hoping to prevent wide scale strikes threatened by some unions during the European soccer championship in June, Tusk said the changes would not be applied to current members of the services.

(Reporting by Gabriela Baczynska; editing by Ron Askew)