The Polish parliament will pass a bill lowering the retirement age in early November, an official from the ruling Law and Justice (PiS) party asserted on October 17.
The reduction of the retirement age was a central plank of the successful campaigns last year by Law & Justice (PiS) to win control of the parliament and the presidency. However, the government has struggled to find the cash to power its spending pledges since taking power in November, and worries about the country's fiscal indicators are rising.
The proposal is to lower the retirement age to 65 for men and 60 for women. The one meaningful reform to come out of eight years in power on the part of the previous Civic Platform was to raise the retirement age to 67 for both.
Analysts warn that the move will likely result in a considerable lowering of pensions and multi-billion costs for the budget. Harbingers of a slowdown in economic growth could complicate matters further.
Still, powered by a majority in both houses of parliament, and a friendly president, PiS is busy pushing its populist agenda. Warsaw has already launched a child benefit programme and is mulling increasing tax-free income, with costs estimated at tens of billions of Polish zloty.
“We want the bill to be passed by the Sejm - the lower house of parliament - within the next two sittings [in late October and early November],” Beata Mazurek, a PiS MP and the head of the parliamentary committee on social policy and family told Polsat News. The ruling party had said earlier it wanted the new rules on retirement to take effect in late 2017.
While there are no definite calculations of the cost of lowering the retirement age, the government suggested in July the bill could hit PLN10bn (€2.3bn) per year. However, state social insurance institution ZUS claims the cost could be PLN40bn-PLN50bn.
The government hopes fast economic growth and improved collection of taxes will cover for the increased spending. That may be too optimistic an assumption, Fitch warned in late August.
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