bne -

Following a long fight with the EU, the Polish government said it's finally set to discuss a proposed bill on raising the limits on foreign investment by the country's private pension funds at some point in the first quarter.

After several challenges by the European Commission to the 5% of assets under management (AuM) limit imposed by Warsaw on the country's second pillar, the EU executive brought the case before the European Court of Justice in 2009. In December 2011, the court determined that the investment cap set out by Polish legislation restricts the free movement of capital in a manner that "cannot be justified".

The court added that apart from restricting Polish funds in their investments, the legal provision had also had a "restrictive effect" in relation to companies established in other EU member states, in that it constituted an "obstacle to the raising by such companies of capital in Poland".

Swift as an iceberg, Warsaw now appears to be acting on the ruling, though clearly very unwillingly. The legislation that the cabinet will discuss will look to raise the limit on investment in foreign currency assets by pension funds to 30% of AuM. According to its work schedule, the bill will be discussed at some point in the first three months of the year, reports Cbonds. In addition, Warsaw is seeking to slow the changes, restriction the expansion of the limit to 5 percentage points every two years. At that rate, Polish pension funds will only be allowed the full 30% limit in 2021.