Pension reforms proposed for police, prison officers and armed services

Discussions are taking place in Poland between the government and trade unions about reform of the pension system for those employed in the public uniformed services, including the police force and various branches of the security forces. Reform of these pensions, which currently cost the state about €2 billion a year, is scheduled to come into effect in 2012 and the government wants them brought into line with the pension schemes for other public sector workers.

Current pension system for public uniformed services

Pensions are paid by the Department of Pensions of the Ministry of the Interior and Administration (ZER) to police officers and employees of the Internal Security Agency (ABW), the Foreign Intelligence Agency (Agencja Wywiadu), the Military Counterintelligence Service (SKW), the Military Intelligence Service (SWW), the Central Anticorruption Bureau (CBA), the Border Guard (Straż Graniczna), the Government Protection Bureau (BOR), and the Prison Service (Służba Więzienna). There are currently about 130,000 pensioners being paid under this arrangement, and the average gross pension is around PLN 3,000 (about €770 as at 17 January 2011). Under current rules, employees of these services are entitled to pension benefits after 15 years of service. An individual’s pension varies depending on most recent salary, allowances and annual bonuses.

• The amount of pension after 15 years of service is 40% of the employee’s most recent salary.

• Each additional year of service increases the pension by 2.6% of the most recent salary.

• Any years in civilian employment before entering the uniformed services are also counted towards pension entitlement. For each additional year of civilian work, the pension is increased by 2.6% of the most recent salary.

• The maximum pension is 75% of the most recent salary paid to those with at least 28.5 years of service.

The State Fire Service (Państwowa Straż Pożarna) has the same pension rules.

Pensions for soldiers are paid from the state budget by the Ministry of National Defence (MON). In 2008, there were more than 105,000 retired soldiers receiving an average gross amount of about PLN 3,000. As in the case of police officers, the soldiers are entitled to a pension after 15 years of service and the rules for determining the amount are much the same, with the additional allowance of an extra 2% of final salary for each year’s service either as a submariner or on supersonic aircraft.

Government’s proposals

The current pension system for the uniformed public services costs the state around PLN 8 billion a year (€2.05 billion). This has prompted the government to attempt to reform the system and it plans to introduce new pension rules for this group of employees by 2012. According to the representatives of the coalition, the government hopes to include the uniformed services’ pensioners in the general pension system. This would mean that soldiers, police officers and members of other uniformed services would have to work until the age of 65 years for men, or 60 for women before being entitled to a pension. The amount of pension would be determined by contributions paid into a retirement plan rather than paid out from subsidies from the state budget. These new rules would apply to all officers joining the uniformed services from 2012 onwards. The government believes that this will save between PLN 16 billion (€4.1 billion) and 17 billion (€4.3 billion) by 2060. The government proposals have not yet been drafted into proposed legislation.

Trade unions’ proposals

Trade unionists from the Independent and Self-Governing Trade Union of Police Officers (NSZZP) are concerned about the government’s plans. NSZZP agrees that there is a need to increase the current minimum of 15 years of service for pension entitlement, but it proposes that the qualifying period should be extended by 5–10 additional years of service. This would mean that the lowest pension, 40% of final salary, could be paid only after 20 or 25 years of service. The trade unionists have also agreed on the need for a minimum age for taking a pension, but they strongly oppose the government’s proposal to set this at 60 or 65 years. Instead, they propose a minimum of 50 years of age.

The Prime Minister, Donald Tusk, was due to meet with representatives of the Federation of Trade Unions of the Uniformed Services (FZZ-SM) on 10 December 2010 when the proposals for pension reform were on the agenda. The federation covers most of the unions in the uniformed services sector and is the biggest body representing their interests.

Marta Trawinska, Institute of Public Affairs