Does a government pension plan make sense? Poles are losing faith in ZUS

According to the latest research commissioned by Useme.com, as many as 71.5 percent Poles do not believe that a state pension will provide them with a prosperous life in the future. In turn, more and more people are starting to save outside the ZUS system, looking for alternatives for a better old age. In the context of these results, a question arises: will the government’s idea of ​​contributing to all civil law contracts actually contribute to higher pensions? The government emphasizes that the reform aims to provide higher benefits, but in reality the prospects are less optimistic.

Insurance reform – higher pensions or lower earnings?

From 2025, it is planned to fully tax all civil law contracts, which will cover 2.3 million Poles, including about 330,000 freelancers. The consequence of this reform will be a reduction in salaries by approximately 1/3, which will translate into higher pensions in the future. The Ministry of Family, Labor and Social Policy emphasizes that thanks to this change, citizens will be able to count on more decent benefits in old age. However, according to data and forecasts, with the current state of the pension system, obtaining a decent pension from ZUS is impossible. Both Poles and institutions such as ZUS and the European Commission predict that after 2050 the replacement rate will be only about 20%. last salary.

Poles do not trust the ZUS reform

In August 2024, UCE Research, commissioned by the Useme.com platform, conducted a study on the assessment of future pensions. The results showed that as many as 71.5 percent Poles do not believe in the possibility of obtaining a decent pension from the state system. Only 17.58 percent respondents hope that such benefits will be sufficient. Interestingly, the government reform is met with resistance not only among citizens, but also among employers and freelancers themselves, who fear a significant drop in wages without visible benefits in the future.

More and more Poles, not believing in the stability of the state system, decide to save for retirement outside ZUS. Various forms of saving are gaining popularity, such as Employee Capital Plans (PPK), Employee Pension Programs (PPE), Individual Pension Accounts (IKE) and Individual Pension Security Accounts (IKZE). Additionally, more and more people use forms of investment such as bank deposits, bonds, real estate or stock market investments. According to a UCE Research study for Business Insider from July 2024, as many as 56.9 percent Poles aged 18-35 save for retirement outside the state system.

Minister Agnieszka Dziemianowicz-Bąk from the Ministry of Family, Labor and Social Policy emphasizes that the reform of civil law contracts is part of the National Reconstruction Plan, which assumes the fight against labor market segmentation. The reform was originally supposed to enter into force in 2023, but it was delayed due to political risk and the negative effects of the pandemic. The second reason for introducing changes is the elimination of the so-called convergence of insurance titles, where in the case of contracts for specific work, there is currently no obligation to pay ZUS contributions. Contributions for all contracts are intended to increase the stability of the social security system.

Demography and the future of pensions

One of the key problems of the pension system is the changing demographic structure of Poland. The number of working Poles is decreasing, and the number of retirees is increasing. Currently, over 6 million people receive benefits from ZUS, and according to forecasts, in 2049 as many as 1/3 of the population will be over 65 years old. The number of people of working age will decrease dramatically, which will further burden the pension system. ZUS data shows that by 2080 the number of people of post-working age will exceed 15 million, and the number of Poles able to work will amount to just over 14 million. These demographic changes, together with rising inflation, will negatively affect the amount of future pensions, which means that even indexation of benefits will not compensate for real declines in the value of pensions.

Will contributing to civil law contracts, including contracts for specific work, guarantee higher pensions for freelancers and contractors? Current forecasts leave no doubts. Without a thorough reform of the entire pension system, the amount of benefits in 20-30 years may be even lower than today. Experts predict that pensions will reach survival levels, which means that contributing to civil law contracts can only reduce wages without any significant benefits in the future. Already nearly 75 percent Poles do not believe in the sense of saving for a decent state pension.