Warsaw, 28 February 1997 (RFE/RL) -- Aleksandra Junko may have been at one time Poland's youngest pensioner. Heart problems forced her to leave her job as a librarian and Chinese linguist at Warsaw University 14 years ago. She was just 34 when she went on a full disability pension.
Nowadays her pension is just 260 zlotys (the equivalent of $86) a month, but she's reluctant to complain. "Pensions are definitely too low," she says, "but since I only worked for eight years, I can't really claim too much money."
Poland not only has the world's youngest retirees -- average age 59 for men and 54 for women -- but it also has, proportionally, the smallest number of workers supporting the greatest number of people who are drawing old-age and disability pensions.
The country has a total of nine million pensioners -- including those on disability pensions as well as retirement benefits -- out of a population of 38 million. The average age of those on disability pensions is just 51. There is one pensioner for every Pole employed in nonfarm work.
Poland and other countries in transition from Communism to the market economy are saddled with pension schemes that are far more comprehensive and generous -- and therefore more expensive -- than those of countries with comparable income levels.
In Poland, for example, the average old-age pensioner gets 74 percent of the average wage -- compared to a ratio closer to 30 percent in the West. But wages are low and pensioners are not satisfied. Kazimiera Olik, a 74-year-old retired accountant, sums up the feelings of many Polish pensioners when she says: "People feel a bit cheated after 30 or 40 years of work. We didn't count on a life of luxury, but we certainly expected a comfortable life."
The state-owned Social Security Office, which is known by the Polish acronym ZUS, simply acts as a transfer agent, taking money from today's workers and handing it to today's pensioners. Unlike private retirement plans that are common in the West, there is no fund that invests money to make payments to today's workers when they retire tomorrow.
In addition, ZUS gets large subsidies from the state budget. In total, pensions are siphoning off nearly one-fifth of Gross Domestic Product, money that economists argue could be better invested elsewhere.
This pay-as-you-go scheme has now become nearly unworkable. It is clear, says Natalia Skipietrow, spokeswoman for the Polish labor ministry, that without reform, the ZUS pension system will soon go bankrupt.
Paul Knotter, World Bank representative in Poland, told an RFE/RL correspondent that reform of the social security system is the most important economic issue facing the Polish government. But reform is a touchy political issue, with pensioners accounting to close to 50 percent of Poland's eligible voters.
Still, Skipietrow says, the government is examining major changes, such as replacing the pay-as-you-go ZUS plan with investment funds -- where premiums paid in earn income for future payouts -- and encouraging people to supplement government pensions with private investments. The government is also working on tightening regulations for granting disability pensions so that the loss of a finger, for example, would be worth less to a construction worker than to a concert violinist.
Meanwhile, Poles with any extra money left over at the end of the month are taking matters into their own hands.
Elzbieta Petrajtis-O'Neill, a 48-year-old Polish freelance translator of English texts, began investing last year with an American investment fund, one of several international funds that have come onto the Polish market in the past few years. She makes monthly investments and will collect a pay-out when she retires in 15 years.
She speaks for many of her generation and younger when she says: "I don't trust ZUS at all. It's a big cheat. People paid a lot of money and now they get starvation pensions. When I'm retired, I'm sure they won't pay me any pension at all."
It's an attitude that is likely to become more prevalent, unless the Polish government acts quickly to reform the nearly-bankrupt state pension system.
This is part four in a four-part series about the transition of the Czech Republic and Poland to market economies.