71.5% of Poles Doubt That Future State Pensions Will Provide a Dignified Life, According to Recent Research for Useme.com. More and More Are Starting to Save for Retirement Outside the ZUS System. Does the Government’s Main Argument for Mandatory Contributions on Civil Law Contracts Align with the Expectations of Poles?
One of the main reasons for the planned full inclusion of all civil law contracts in the ZUS system from 2025 is the possibility of accumulating contributions for a higher pension. However, implementing this reform would mean that starting next year, over 2.3 million Poles, including more than 330,000 freelancers primarily working under contracts for specific tasks, would receive nearly 1/3 lower wages. In exchange, according to assurances from the Ministry of Family, Labor and Social Policy, Poles are expected to receive higher pensions in the future, allowing for a dignified retirement. Unfortunately, the reality is different. Maintaining the status quo in the current pension system makes this entirely impossible and unrealistic. Both Poles, as indicated by recent research, and institutions like ZUS and the European Commission understand this. The latter two estimate that by 2050, Poles will receive around 20% of their last salary, known as the replacement rate.
What Pensions Do Poles Expect?
On behalf of the Useme.com platform, the research company UCE Research conducted a survey from August 3-5, 2024, among a representative sample of Poles regarding their views on the mandatory inclusion of civil law contracts in the pension system. When asked, “Do you believe that the future state pension will allow for a dignified life?” a decisive majority of respondents (71.5%) answered no, with 34.76% responding “definitely no” and 34.74% “probably no.” A positive response was given by 17.58% of respondents, with 7.55% saying “definitely yes” and 10.3% “probably yes.” About 10.92% of respondents replied “I don’t know/hard to say.”
*”The results of the research commissioned by us leave no room for doubt. Poles do not believe in the main arguments put forth by the government for implementing the reform aimed at fully including contracts for specific tasks in the ZUS system. Dignified state pensions in the future, given the current pension system where the number of workers is decreasing and the number of retirees is drastically increasing, are unrealistic. The research also shows that Poles expect the government to negotiate with the European Commission regarding changing the wording of the so-called milestone to prevent the ‘inclusion’ of all contracts for specific tasks in Poland in the near future. Interestingly, the opponents of the planned reform include both employers and freelancers themselves,”* says Przemysław Głośny, CEO of Useme.com.
What Are the Alternatives?
Since Poles do not believe they will receive dignified state pensions in the future, what remains? What real options are on the table? Saving outside the state pension system. Currently, there are many options available. From Employee Capital Plans to various opportunities offered by the second (PPE) and third pillar (IKE, IKZE, OIPE), to independent saving outside the pension system, such as deposits, bonds, or more complex financial instruments like investments in commodities, real estate, or shares of publicly listed companies. According to research conducted in July by UCE Research for Business Insider, as many as 56.9% of Poles aged 18-35 declare that they save additionally for retirement outside the state system.
Why Does the Polish Government Intend to Include All Contracts?
According to Agnieszka Dziemianowicz-Bąk, the Minister of Family, Labor, and Social Policy, the government aims to introduce a reform of civil law contracts that will take effect in just three months. The ministry cites two main reasons for this. The first is the implementation of the National Reconstruction and Development Plan (KPO), and the second is the so-called overlap of titles to social insurance. In the first case, the government argues that this necessity is part of fulfilling a milestone from the KPO submitted to the European Commission by the Polish administration, aimed at combating the so-called segmentation of the labor market. Milestone A71G stipulated that the reform was to take effect in 2023; however, the PiS government postponed its implementation due to concerns over the political cost of such a move, as well as the negative effects of the pandemic on businesses. It’s worth noting that it was the previous government under Prime Minister Morawiecki that included such a requirement in the KPO, not the European Commission.
As a second reason for changing the current legal state, the Ministry of Family, Labor, and Social Policy cites the desire to eliminate the so-called overlaps in social insurance titles. Currently, for contracts for specific tasks, there is no inclusion in the ZUS system at all, and for contracts of mandate, contributions do not need to be paid if, for example, contributions are paid by another employer based on at least the minimum wage. They also do not need to be paid if someone has at least two contracts per month and contributions have been paid for the first contract at least at the level of the minimum wage.
Considering the decreasing number of actively working Poles and the increasing number of retirees (ten years ago, there were just under 5 million; today, over 6 million people receive pensions from ZUS, according to Infor), along with the rising average life expectancy for both men and women, pensions in Poland will systematically decrease. By 2049, one-third of Poles will be over 65 years old, and the number of working individuals will be significantly lower than those of retirement age. According to ZUS, by 2080, the number of Poles of working age will reach just over 14 million, while the number of post-working-age individuals, i.e., seniors, will exceed 15 million. The negative factors mentioned above are already impacting the amounts of pensions being paid—benefits granted from April 2024 are even 6.6% lower, according to data from GUS and ZUS.
Another factor reducing the real purchasing power of future pensions is inflation. Although pension adjustments occur in the Polish pension system, the “realization” of pensions never keeps pace with the increase in real prices, partly because indexation is based on CPI inflation, which is always lower than real inflation.
So, will freelancers, creators, and contractors be able to expect dignified pensions in the future after the planned inclusion of civil law contracts in the pension system starting next year? Unfortunately, no. Unless the entire pension system is reformed, it is expected that pensions in 20-30 years will be significantly lower than they are today; some experts claim they may be at a survival level. Thus, the inclusion of civil law contracts will lead to multiple contributions being paid, reducing freelancers’ earnings by 28%, with no clear benefits in return. Nearly three-quarters of Poles do not believe in the arguments for saving for a dignified state pension.
Source: [Manager Plus](https://managerplus.pl/715-polakow-watpi-w-godne-emerytury-z-zus-jak-pelne-ozusowanie-umow-cywilnoprawnych-wplynie-na-przyszlosc-freelancerow-65571)
