The Polish government has finally published the draft bill radically changing the second-pillar pension system.The bill, issued late on 10 October, puts in place essentially all the proposals announced in September, alongside punitive restrictions on advertising by the second-pillar funds (OFEs) and some proposed changes to the third pillar.The bill is now out for a 30-day public consultation.Its publication marks a U-turn from 1999, when the establishment of the mandatory second pillar was seen as a means of providing higher retirement income while eventually reducing the pension and public deficit, to a position where the system has ostensibly done the opposite. The draft bill states that the costs associated with the OFEs had, according to the Finance Ministry, ballooned to PLN279.4bn (€66.7bn) by the end of 2012.This was equivalent to 17.5% of GDP and more than 30% of the country’s public debt.The Finance Ministry has estimated that the changes will in 2014 reduce the public debt by 8.4% of GDP according to national accounting standards and by 9.2% according to EU methodology.As expected, the first pillar Polish Social Insurance Institution (ZUS) will handle the OFE retirement payouts, with the accumulated funds transferred incrementally 10 years before retirement.The controversial investment changes are also in place.All Polish sovereign and state guaranteed bond holdings, including central bank issues, will be transferred from the OFEs on 3 February 2014.The law actually stipulates 51.5% of portfolio value on 3 September 2013 – the day before the government officially announced the changes – so the funds that cannot satisfy this quota with state bonds will have to make up the difference with other non-equity assets such as cash and bank deposits, road and municipal bonds.Earlier, the Polish Chamber of Pension Funds (IGTE), which has disputed the legality of both the transfer of assets to ZUS before retirement and the removal of government securities, sought opinion from the European Commission.Małgorzata Rusewicz, IGTE acting president, told IPE: “We still emphasise that proposed changes raise serious legal doubts.“In accordance with legal regulations valid in Poland, the OFEs have the right to invest the assets of their members until the insured retire.“Therefore, the transfer of assets from the OFE to ZUS, even if it concerns only a part of them, as in the case of bonds, constitutes appropriation of the assets that are the property of the OFE and its members by a public institution without compensation.“The assets accumulated on behalf of the insured will cease to be private property – they will become public property and will be consumed by the state.”In future, the OFEs will be banned from investing in any state securities, not just Polish ones, as well as state-guaranteed loans, deposits and related instruments. As part of what the government has consistently called “real economy” investment, they will be allowed to invest in Polish road and other infrastructure bonds, corporate and municipal issues.As of 4 February 2014, the OFEs will have to invest a minimum 75% in equity, irrespective of their members’ age and risk appetite.“Forcing a pension fund to invest a minimum 75% exclusively in shares will significantly increase the risk of such transactions and make it impossible to manage in a manner beneficial for the insured,” said Rusewicz.“It will make it impossible to protect the real value of those assets in periods of a slump in the economy. Until now, such solution has never been used in pension funds anywhere.”Other investment restrictions will be lifted as of 1 July, including the abolition of the minimum investment return benchmark.The foreign investment cap of 5% will be raised to 10%, then 20% in 2015 and 30% in 2016.The OFEs will be able to lend stock, a practice previously prohibited, while a separate law will specify in what circumstance they will be able to use derivatives, also banned up till now.Contribution fees will be halved, to 1.75% for the OFEs and 0.4% for ZUS, and the contributions to the OFEs capped at 2.92% of gross wages.The hitherto mandatory system becomes voluntary.New entrants to the labour market and existing OFE members will have a three-month window from 1 April to declare their intention to remain in the second pillar or have future contributions transferred to ZUS.They can make this choice in person, by post or online.Those who do not will by default have their future contributions moved to ZUS.Workers will be able to change their decision, with the April-June window open in the first instance after two years, then every four years.This is effectively the only concession the government has made since its proposals were announced in September.Previously, the freedom to change one’s mind was to be restricted to those workers who had opted to remain in the second pillar.OFE members will be able to change their fund every three months, although it is not clear how they will make their decision, as the government also dropped a bombshell by making the publication and distribution of OFE advertising a criminal offence subject to a penalty of PLN1m or up to two years in prison.“We are surprised with additional change, according to which there will be no possibility to advertise OFEs in any way,” said Rusewicz. “We honestly don’t know at the moment how to interpret these rules. We don’t know, for example, if the IGTE would be able to organise any informational campaign regarding OFEs.“It would be a phenomenon for the whole EU if such a rule would be adopted by the Polish Parliament.”The draft also covers changes in the third-pillar IKZE retirement accounts introduced in 2011 to improve the take-up, including increasing the limit on tax-free contributions and reducing the tax on payouts to 10%.
Already surpassing her total from a season ago, redshirt junior forward Paige Adams leads the Badgers’ offensive attack with four goals and one assist in just six matches.[/media-credit]In their last game before the Big Ten schedule begins, the Wisconsin women’s soccer team travels eastward Wednesday for their annual matchup versus in-state rival Wisconsin-Milwaukee.The No. 13 Badgers (5-1) have had problems with the Panthers (1-3-1) in recent years with only one win, three losses and a tie since head coach Paula Wilkins took over. Wisconsin will look to avenge last year’s 2-1 in overtime loss to Milwaukee.Wilkins said she knows Milwaukee is going to give Wisconsin everything they’ve got Wednesday night.“It’s always been a great in-state rival game for us,” Wilkins said. “Throughout the years we have exchanged wins and losses. They are always well organized. They are going to be very good and they are going to want to play. Their movement off the ball and ability to keep the ball is fantastic.”UW-Milwaukee, a member of the Horizon League, is currently on a three-game losing skid, with their last win coming at home against St. Bonaventure Aug. 19.Wednesday’s game with the Panthers marks the Badgers’ last contest before they enter Big Ten play.Wisconsin has every excuse to overlook the single-win Panthers Wednesday and look ahead to its gigantic Big Ten matchup with No. 11 Penn State Sunday. However, UW redshirt junior forward Paige Adams said she believes there is enough of a rivalry between the two Wisconsin teams to keep the Badgers from looking ahead to Sunday’s game.“I think just because it is Milwaukee and we have such a rivalry with them that no matter what, we are always focused on beating them rather than the game ahead,” Adams said. “I know Penn State is a big game but we take it one game at a time and that’s what we are going to do.”The Badgers have had no problems lighting up the scoreboard this year with 17 goals already on the young season, good for an average of nearly three goals a game. They will hope to keep their explosive offensive attack going against a Milwaukee team that have given up 15 goals in five games and has allowed three or more goals in its last four matches.Adams, who leads the team with four goals, hopes the offensive unit will improve on its fundamentals against the overmatched Panthers’ defense.“I think we just have to get back to the basic things that we got away from a little bit,” Adams said. “Like pressing as a group and recovering in transition. Those are some things we got away from in the last game, but we are going to get back there.”Milwaukee’s offensive squad has not posed much of a threat for opposing teams thus far, scoring only seven goals on the season while being shut out in over half its games.The shortage of goals for UW-M may be a result of the lack of experience on the team. Milwaukee has only four seniors on the 33-man roster, and only one of them is a forward. With a lack of experience in the offensive unit, the Panthers lack a veteran to take over the offensive burden. Amy Kauffung, with two goals on the season, is the Panthers’ only player who has scored more than one goal.The stagnant Milwaukee offense might be just what Wisconsin’s defense needs to get back on track. Wisconsin redshirt sophomore defender Alexandra Heller said the defense will need to stay focused for all 90 minutes in order for the defensive play to remain consistent.“The key to our defensive success is staying focused,” Heller said. “In the first halves of games we do really well and then we kind of drift off and lose our mentality. So I think we just have to make sure that we do the details right.”The defenders aren’t the only ones who want to see more stability. Wilkins said she hopes the game with Milwaukee will be a stepping stone in the entire team’s effort to remain consistent for an entire game.“The biggest thing for us is consistency,” Wilkins said. “I saw some things in the Illinois State game and then some things where our work rate just wasn’t high enough. So we are demanding more from each other to be better all the time, so that will be a big thing.”