Kaetana Leontjeva, Lithuanian Free Market Institute, Senior Policy Analyst
Commentary published in RZEZCPOSPOLITA rp.pl
Polish government’s plans to nationalize bonds held in private pension funds have turned the world’s spotlight on Poland. Like many of Poland’s neighbors, Lithuanians are also awaiting the Polish parliament’s decision in the scandalous plan to seize the accumulated bonds. Since the crisis, both Polish and Lithuanian employees were forced to suffer cuts in transfers from their social insurance contributions to private savings accounts. This has already resulted in lower accumulated assets for 1 million Lithuanian participants (a third of Lithuania’s population) in the private savings scheme.
To add to these grievances, Lithuanian workers are now facing a new threat: calls from some of the top policy-makers to nationalize assets already accumulated in private pension savings accounts. When voicing such calls, Lithuanian politicians are looking “up” to the Hungarian and possible Polish example.
As representatives of 1 million of future retirees are fighting to save people’s assets from expropriation, it is surprising to see Polish officials coming to Lithuania and presenting their likely anti-constitutional seizure at the Lithuanian parliament. On October 7, 2013 Zbigniew Derdziuk, President of Poland’s Social Insurance Institution presented the current “transformation” of the Polish pension system in the Lithuanian parliament at a conference devoted specifically to spreading the idea about the Polish nationalization of pension fund assets. Perhaps the Polish policy-makers would want other countries to follow suit, as a sign that Poland is not the only expropriating country? Unfortunately, Lithuanian politicians have caught this virus as they presented their case for forced transfer of current workers from the private pension scheme entirely to the state pension scheme.
It is unfortunate that the political prospects to sustain private pension schemes are looking bleak in our region, as some policy-makers prove so unwise as to sacrifice long-term pension reforms in favor of short-term spending to buy election votes. In such case, the least they can do is confine their disastrous nationalization policies within their borders, rather than force it as a “best practice” solution onto citizens of other countries.