Poland’s second-pillar pensions reform faces class action

first_imgPoland’s controversial second-pillar pensions law, which took effect in 2014, is facing a new legal challenge.On 4 March, the Warsaw District Court ruled that a class action initiated by lawyer Paweł Kowalczyk for 53 claimants could go ahead.The lawsuit – against the Polish State Treasury, Social Insurance Institution (ZUS) and pension fund management companies – claims the transfer of Polish sovereign bonds from pension fund (OFE) portfolios to ZUS violated members’ property rights.The transfer, in February 2014, removed PLN153.2bn (€36.7bn) in assets, equivalent to 51.2% of the previous month’s net asset value. The Court ruled that, because the claims of the individuals – all OFE members – were substantially the same, the lawsuit could proceed as a group action.Other members can now sign up to the action.Any compensation from the State Treasury, should the case succeed, would be subject to a separate lawsuit.The ruling, which is subject to appeal, has already caused disquiet, given that the government had earlier insisted its reforms were legally watertight.There are other outstanding challenges to the 2014 law.In January 2014, president Bronisław Komorowski, after signing off the law, referred sections to the Constitutional Tribunal.These included the ban on investments in sovereign bonds, the requirement for a high level of equity investment and the prohibition on pension companies advertising during the window when all members had to declare that they wanted to remain in the second pillar or default to ZUS. Subsequently, Irena Lipowicz, Poland’s Human Rights Ombudsman, referred the law to the tribunal on the grounds it violated public confidence in the State.Neither party addressed the issue of legal ownership of second-pillar assets.The tribunal has yet to set a date for the hearings.Meanwhile, the size of the second pillar has shrunk dramatically following the bond removal, the decision of the majority of former members to stop further contributions once the system became voluntary, the incremental transfer to ZUS of the assets of members with 10 or fewer years left till retirement, and the massive indifference of new labour market entrants.In January 2015, net assets, at PLN150.6bn, were down 49.6% year on year in Polish zloty terms, while the total monthly contribution plunged by 78.5% to PLN231m.last_img read more

Rich Indians Turn To Cyprus For Coveted European Union Passports

first_imgIndia’s growing affluent have an eye on the European Union and for many Cyprus is the gate where they can buy residency permits and passports allowing them easier travel in the bloc, with the advantage of being in a country where English is widely spoken.Read it at Tornos News Related Itemslast_img