Policy Description

Employment Policies for the 50+: Poland (2015)

Year

2015

Country

Poland

Topic

Work & Retirement

Introduction

For many years in Poland, the legal retirement age was set at 60 years for women and 65 years for men. Before the economic transition, early retirement policies were treated as compensation for work conditions or as a policy tool that helped to calm some of the social unrest. As a result, early retirement became widespread over the course of 1970s and 1980s. 

Economic and social policy after the economic transition favoured early retirement. The deep restructuring of the economy led to the significant mismatch of the skills possessed by older workers and the requirements of the newly emerging employers. In this light, early retirement and easy access to disability pensions were seen as a solution to reduce tensions in the labour market. With the increasing inflow to early retirement and the related cost of benefit payments, in the late 1990s more and more experts and policy makers became aware of the necessity to reduce the various routes of early retirement provision. 

Despite some efforts (replacement of some early retirement benefits with less generous pre-retirement transfers), these policies were ineffective until 2006, and the effective age of retirement was stable and five years lower than the legal retirement age. The effective retirement age increased after 2008, with new regulations on early retirement transfers. Until 2013, the pension age in Poland was different for women (60) and men (65). In 2013, a raise in the pension age was set to 67 (for men by 2020 and for women by 2040) (OECD 2013). However, in 2015 the newly elected president and the new government initiated a change resulting in the return to the previous level of retirement age at 60/65. 

Following widespread early retirement, Poland had very low rates of employment in the age group 55 and over. Until 2005, the employment rate in this age group had fallen gradually to only 26.1 % in 2004 (Chłoń-Domińczak 2009). The reduction of early retirement access, combined with the promotion of measures stimulating the employment of people 50+, introduced under the "Solidarity of Generations 50+" programme from 2008 (Rada Ministrów RP 2008) and its further update from 2013 (Rada Ministrów RP 2013), led to the introduction of the set of activation policies that helped to increase the employment rate levels to 42.5 % in 2014. Yet, as is pointed out in the recent OECD evaluation (OECD 2015), Poland needs to pursue a path of implementing co-ordinated active ageing policies. Given the long period of passive policy in this area, this also requires building sufficient support and understanding among the relevant stakeholders (Perek-Białas et al. 2006).

Activation policies

In Poland, the activation policies for the population 50+ were summarised in 2008 in the government programme "Solidarity of Generations 50+" (Ministry of Labour and Social Policy 2008; Rada Ministrów RP 2008).  The programme envisaged the following measures:

  • Improvement of working conditions, promotion of employment of people over 50, and age management (through spreading knowledge among employers and employees on age management, promoting the benefits of employing people over 50, implementing age management strategies in companies, adjusting working conditions of people over 50 to their needs, and health prevention) – these policies were implemented mainly through various programmes financed from public sources.
  • Upgrading skills and qualifications of employees over 50 (through the creation of conditions for building their education pathways, popularisation of life-long learning for people over 45, and adjusting training offers to their needs) – to that end, a new Training Fund was established under the Law on Employment Promotion and Labour Market Institutions in 2014. Initially the fund financed training of workers 50+.
  • Reduction of labour costs related to the employment of people over 50 (through exemptions from the contributions to the Labour Fund and the Guaranteed Employee Benefits Fund for people in the pre-retirement age, and a reduction in the number of days of sick leave for which remuneration is paid by the employer) – the relevant legislation was amended in 2009.
  • Activation of the unemployed or people under threat of unemployment who are over 50 (through popularising labour market programmes, the development of individual action plans, and adjusting the offer of active labour market programmes to meet the needs of people over 50) – introduced in the legislation on employment promotion and relevant public programmes.
  • Activation of people with disabilities (through setting up stable legal frameworks for employment and occupational rehabilitation – this was followed by changes in the legislation supporting the employment promotion of people with disabilities.
  • Expanding the opportunities of employment for women (through the development of services that allow the balancing of career and family life, simplification of regulations on the establishment of kindergartens, support for the development of a kindergarten net, especially in rural areas, and support for other forms of childcare – relevant legislation was introduced, including the new law on care for children in the age group 0-3, as well as the expansion of pre-school education and limitations on the cost of access to pre-school education.
  • Limitation of employees’ withdrawal from the labour market within the social benefit system (detailed goals focus on the rise of the effective retirement age and a gradual equalising of the retirement age for women and men), which is described below in the early retirement policy measures. 

Early retirement policies

Since 1970, Poland followed an early deactivation policy. Many early retirement opportunities were granted to people working in positions included in the broad list of occupations in special conditions or of a special character. Additionally, early retirement was granted to people working in the railway sector, miners, and teachers. Generous early retirement with no age limit was also available for people working in the police force, army, and other so-called ‘armed forces’. Early retirement was also payable to farmers who passed their land to the younger generations. During the economic transition, early retirement was also extended to people who lost their jobs due to their employer going bankrupt or having undergone significant restructuring. Last but not least, early retirement was also available based on seniority – women could retire at the age of 55 if they had worked for 30 years or longer. 

As a result of these multiple policies, the effective retirement age in Poland was very low. Attempts to reduce access to early retirement with the replacement of early retirement pensions for laid-off workers with pre-retirement benefits introduced in late 1990s were not successful. Between 1998 and 2005, the average age of retirement from the largest pension system covering employees and self-employed was 59 years for men and 56 years for women. At the same time, the number of people receiving pensions or pre-retirement benefits before legal retirement age (60/65) rose from 1.1 million in 1998 to 1.6 million in 2005.

The reduction of access to early retirement was envisaged as a part of the pension reform introduced in 1999. According to the initial plan, early retirement was expected to be reviewed and limited to jobs performed in conditions that, according to medical knowledge, may justify early withdrawal (due to health risks or to the requirement to be in the best possible condition to perform the job). The change was planned for 2007. However, due to the prolonged work on the revision of these policies and political decisions of the government, the initial schedule was postponed and the new early retirement rules came into force from 2009. The new legislation limited access to early retirement as well as removed the possibility to retire early due to seniority conditions. Furthermore, from 2004 access to pre-retirement benefits was also reduced, following the revision of the legislation and policies initiated by Deputy Prime Minister Prof. Jerzy Hausner. Due to the ruling of the Constitutional Tribunal, additional temporary access to early retirement at age 60 was granted in 2009 to men born before 1948. 

Following the legal changes after 2009, the number of people receiving pension transfers before the legal retirement age was halved from 1.3 million in 2009 to less than 0.7 million in 2014, which was combined with the rise of the employment rate in age group 55-64.

Bibliography

  • Chłoń-Domińczak, A. "Retirement Behaviour in Poland and the Potential Impact of Pension System Changes". Centre for European Policy Studies, Brussels (2009).
  • Ministry of Labour and Social Policy. "The Programme “Solidarity across generations. Measures aiming at increasing the economic activity of people over 50". Warsaw (2008): 1–3.
  • OECD. (2013). "Country Profiles - Poland". In OECD "Pensions at a Glance OECD and G20 Indicators". OECD Publishing, Paris (2013): 313-317.
  • OECD. (2015). "Ageing and Employment Policies: Poland". OECD Publishing, Paris (2015). Available at: http://dx.doi.org/10.1787/9789264227279-en.
  • Perek-Białas, J., Ruzik, A., & Vidovićová, L. "Active ageing policies in the Czech Republic and Poland". International Social Science Journal 58(190) (2006): 559–570. Available at: http://dx.doi.org/10.1111/j.1468-2451.2008.00655.x
  • Rada Ministrów RP. "Program Solidarność pokoleń. Działania dla zwiększenia aktywności zawodowej osób w wieku 50+". Warsaw (2008): 1–87.
  • Rada Ministrów RP. "Program Solidarność pokoleń Działania dla zwiększenia aktywności zawodowej osób w wieku 50+". Warsaw (2013).

Authors

Agnieszka Chłoń-Domińczak
Institute of Statistics and Demography
Warsaw School of Economics SGH

Data collected in the framework of the Population Europe Research Finder and Archive (PERFAR) in 2015.

Please cite as:
SPLASH-db.eu (2015): Policy: "Employment Policies for the 50+: Poland" (Information provided by Agnieszka Chłoń-Domińczak). Available at: https://splash-db.eu [Date of access].