There will be no double indexation of pensions for now. The idea is late

The government wants to amend the Act on pensions and annuities from the Social Insurance Fund and introduce a second indexation of pensions when inflation in the first half of the year exceeds 5%. This would mean indexation not only in March, but also in September (after meeting the condition of high inflation). This solution is similar to the double increase in the minimum wage that we have been dealing with for two years. Due to high inflation, minimum wages were raised by law not only from January 1, but also at the beginning of July.

Double indexation of pensions

Donald Tusk talked about the idea of ​​double valorization during the election campaign. He assured that this would not involve the withdrawal of existing pension benefits.

– 13th and 14th pension will be paid. There are funds in the budget for this. Double indexation of pensions in the event of inflation exceeding 5%, which will be the case this year, money is guaranteed for this, so double indexation of pensions and pensions will also be paid, i.e. twice a year – announced Prime Minister Donald Tusk.

The currently applicable regulations provide pensioners with one indexation per year, regardless of whether inflation exceeds the threshold specified in the Act. When determining the indexation level, the average annual inflation rate plus at least 20 percent is taken into account. from the pace at which the average salary grew.

However, the idea of ​​a second indexation seems too late, because inflation has been systematically falling for several months. On Friday, March 29, the Central Statistical Office will provide a quick estimate of inflation for March. Economists from leading banks unanimously predict that it could fall even below 2.5%.

Inflation for March may be record low

If the March inflation reading is consistent with the median forecast and amounts to 2.3 percent, price growth in Poland will slow down to the lowest pace since April 2019, when inflation amounted to 2.2 percent. If this happens, the double indexation condition will not be met. Piotr Kuczyński, chief analyst at Xelion, guest of “Studia Biznes” at gazeta.pl, said this.

– I have sad news for retirees – in my opinion there will be no second indexation this year – he said in the program. – Last year the base was extremely high, so much so that compared to last year this increase (in prices in March – ed.) will be small. Many analysts say that inflation may be even lower than 2.5%, which is the NBP target.