Retirement age raised despite trade union opposition

Despite fierce opposition from the unions and the public, the Polish government has raised the retirement age for both men and women to 67 in an effort to safeguard its economy. It had been 65 for men and 60 for women. The Civic Platform-led government also increased the retirement age for people in the armed forces, police and some other uniformed services. After heated debate, the regulations were accepted by the Polish parliament and signed by the president on 1 June 2012.

Background

Raising the retirement age to 67 for both men and women was one of the most important reforms that the Civic Platform (PO) government planned to introduce (PL1112019I) as a way of safeguarding public finances (PL1201019I). The government argued that the economically active population could not sustain the current retirement age of 60 for women and 65 for men, given the additional burdens of an ageing population, increasing life expectancy and decreasing periods of employment.

The retirement age has also been raised for people in the uniformed services, such as the police and army, who are covered by a separate pension system.

Limited tripartite consultations

The government proposal of 13 February 2012 to make changes in the Act on pensions and benefits from the Social Insurance Fund was debated within the Tripartite Commission for Social and Economic Affairs (TK) on 22 March 2012.

According to the TK communiqué (in Polish, 45Kb MS Word doc) on 22 March, employers supported the plan to raise the retirement age to 67. However, they also proposed a range of supplementary policies, such as pro-family measures and the reduction of ‘pension privileges’ for some categories. Trade unions expressed their opposition to raising the retirement age and proposed alternative policies aimed at increasing contributions to the general pension system.

On 13 April 2012, the presidency of the TK met again without reaching agreement on the proposed reforms. Nevertheless, the government declared the consultation process over.

Discussions with trade unions about increasing the retirement age for the uniformed services had been underway since 2010 (PL1012019I). The trade unions’ major achievement was the abandonment of an earlier government plan to include uniformed services in the general pension system. Unions also succeeded in limiting the proposed reforms only to new employees.

Trade union campaigns

Between December 2011 and April 2012, the Independent and Self-Governing Trade Union Solidarity (NSZZ Solidarność) collected more than two million signatures calling for a national referendum on whether to keep the retirement age at 60 for women and 65 for men.

According to Polish law, a proposal to hold a referendum must be considered by the parliament (Sejm) if it is supported by more than 500,000 citizens. By 16 February 2012, NSZZ Solidarność had submitted around 1.4 million signatures. However, on 2 April 2012, members of parliament (MPs) representing the PO and the Polish Peasant Party (PSL) voted against holding a referendum and the proposal was turned down.

In 2010 the All-Poland Alliance of Trade Unions (OPZZ) had proposed that workers should be able to retire after 35 years of work for women, and 40 years for men, and this proposal was also rejected by parliament (PL1201019I).

Trade unions complained the pension reforms were being introduced in haste, without the necessary information and intensive consultation with social partners. The unions said that in some western European countries similar changes had been accompanied by discussions that lasted much longer.

Between March and May 2012, a number of large trade union demonstrations took place. These included the Pension Village, a protesters’ camp set up in front of the prime minister’s offices between 26 March and 2 April, and outside parliament between 11 and 14 May. Demonstrations were organised in front of the presidential palace on 29 May by NSZZ Solidarność and on 1 June by OPZZ. The protesters were joined by other trade unions and opposition political parties, including Law and Justice (PiS) and the Democratic Left Alliance (SLD).

The trade union campaign also involved advertisements in major nationwide media and the launching of an internet site, www.stop67.pl.

The National Commission of NSZZ Solidarność, which convened in the Pension Village in front of the parliament on the day of the pension reform vote on 11 May 2012, put forward several alternatives to raising the retirement age that they believed would sustain the existing retirement ages. They proposed:

  • the introduction of obligatory contributions to the social security and pension systems for all types of employment contract, including civil law ‘junk’ contracts not subject to employment law (PL1111019I);
  • linking the calculation of social security contributions for employers from the (current) declared levels of income to real levels of income, estimated at the minimum level of the average wage in the economy;
  • regulating temporary work to avoid abuse by employers seeking to reduce their labour costs and social security contributions;
  • introducing better health and safety protection for employees of pre-retirement age and improving policies aimed at the labour market inclusion of young people;
  • creating a mechanism of social partners’ control over the Labour Fund in order to develop more efficient active labour market policies.

Although the direct effect of the trade union actions is difficult to assess, according to a survey (in Polish) conducted by the Public Opinion Research Centre (CBOS) in April 2012, 79% of Poles were against the change in retirement age for men and 86% against the change for women.

Retirement age raised despite protests

On 11 May 2012, the parliament accepted the government’s proposal to raise the retirement age to 67, with the coalition of PO, PSL and Palikot’s Movement (RP) voting for the reform and the SLD and PiS against it.

The amendment to the Act on Pensions was signed by President Bronislaw Komorowski on 1 June 2012, and from 1 January 2013 the retirement age will increase by three months every year. The retirement age of 67 for men will be reached in 2020 and for women in 2040.

A partial pension, 50% of the full pension, will be available for women from the age of 62 if they have paid social security contributions for at least 35 years, and for men from the age of 65 if they have paid contributions for at least 40 years. Although the government claimed that partial pensions were the result of the negotiations with social partners, trade unions suggested that partial pensions would be, in practice, very low.

The amendment includes the requirement that by December 2013, the Ministry of Labour and Social Policy (MPiPS) should prepare proposals for active labour market policies targeting workers over the age of 60, and a programme supporting the equal treatment of women and men in the labour market.

NSZZ Solidarność and OPZZ have criticised the president’s decision, and both organisations have declared that they will continue their efforts to revoke the amendments. NSZZ Solidarność has also issued three proposals to the president on the legislation which it believes should be taken into account in future negotiations on pension system reforms – on raising the minimum wage, on improving the situation of temporary workers and on introducing obligatory contributions to the social security and pension systems from ‘specific task contracts’ (umowa o dzieło) that are currently exempt (PL1111019I).

Uniformed services pension reform adopted

On 1 June 2012, the Act reforming the pension system for the 11 uniformed services was also signed by the president. The new regulations cover professional soldiers, police officers, as well as people working in the Internal Security Agency (ABW), Foreign Intelligence Agency (AW), Military Counterintelligence Service (SKW), Military Intelligence Service (SWW), Central Anti-Corruption Bureau (CBA), Polish Border Guard (SG), the Government Protection Bureau (BOR), National Fire Service (PSP) and Prison Service (SW). The reform assumes that:

  • the functionaries of uniformed services will be able to retire at the minimum age of 55 and after 25 years of service (previously they could retire after 15 years’ service and there was no minimum age threshold);
  • in line with trade union proposals, new regulations will only apply to new recruits from 2013; those already in service will be able to choose between the old system (retirement after 15 years) and the new system (retirement after 25 years of service);
  • the basic pension at the age of 55 will be 60% of the average salary from any 10 successive years of an individual’s service selected by the eligible employees themselves (the pension was previously 40% of final salary after a minimum 15 years of service).

The Federation of Trade Unions of the Uniformed Service ( FZZ-SM) expressed its partial satisfaction with the results of the negotiations over the reform. The FZZ-SM’s President, Antoni Duda, said the final Act submitted to the parliament differed from the one negotiated with trade unions and that the union was considering referring the Act to the Constitutional Tribunal (Trybunał Konstytucyjny).

Commentary

The government, supported by the votes of PO, PSL and Palikot’s Movement in parliament and by the president, has decided to ignore the referendum initiative of NSZZ Solidarność.

Fears about social conflict on the eve of the UEFA Euro 2012 football tournament, which was due to be hosted by the Ukraine and Poland in the last three weeks of July, led to these major pension reforms being introduced in haste and without adequate tripartite consultations. This led to the radicalisation of the trade unions.

However, NSZZ Solidarność’s approach attracted significant public support and the union is likely to use this in the months to come to advance its lobbying on other issues, including better regulation of ‘junk’ civil employment contracts not governed by labour laws and of temporary work.

Adam Mrozowicki, Institute of Public Affairs, University of Wrocław

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