World Bank2012-08-132012-08-132003-03https://hdl.handle.net/10986/11317In January 1999, Poland launched a new pension system that was the result of 5-6 years of broad outreach campaigns and complex negotiations within the government and between the government and key stakeholder groups. A number of compromises were made to broaden support for the reform; these changes will significantly increase costs during the transition period but without undermining the long-term viability of the reformed pension system. Post-communist Poland operated on a traditional pay-as-you-go (PAYG) system; payroll taxes of current workers financed the pension benefits of current retirees. Due to a number of policy changes expanding early retirement options and other privileges, pension costs skyrocketed in the mid-1990s and Poland had one of the highest spending rates of any post-communist transition country. In addition, long-term demographic shifts led to a decline in people paying into the system relative to those receiving benefits. Contribution rates (i.e., payroll taxes) had already risen from 25% in 1981 to 45% in 1990. They could not easily be pushed up further.CC BY 3.0 IGOMACROECONOMIC POLICYPOLICY REFORMPENSION SYSTEMSSTAKEHOLDER PARTICIPATIONPAYROLL TAXESPENSION PLANSPAYROLLPOLICY MAKING PROCESSESGROSS DOMESTIC PRODUCTGOVERNANCE APPROACHCONSENSUS BUILDINGLEGISLATIVE PROCESSOUTREACH ACTIVITIES ADVERTISEMENTSADVERTISINGAGEDBUSINESS ASSOCIATIONSCABINETCITIESCIVIC ENGAGEMENTCIVIL SOCIETYCONTRIBUTION RATESDEFINED BENEFITSELECTIONSELIGIBLE VOTERSINDIVIDUAL ACCOUNTSINDIVIDUAL BENEFITSLAWSLEARNINGLEGISLATIONLEGISLATIVE PROCESSMANDATORY SYSTEMMEDIAMULTI-PILLAR SYSTEMPARLIAMENTPARLIAMENTARIANSPENSION COSTSPENSION FUNDPENSION FUNDSPENSION PLANSPENSION REFORMPENSION SCHEMESPENSION SYSTEMPENSIONERSPENSIONSPOLICY MAKINGPOLITICAL LEADERSPRIME MINISTERPRIVATE PENSIONPRIVATE PENSION FUNDSPRIVATE PILLARPROGRAMSPUBLIC OPINIONRADIOREGULATORY AGENCYREGULATORY MECHANISMSREPRESENTATIVESRETIREESRETIREMENTRETIREMENT AGERETIREMENT OPTIONSSOCIAL INSURANCESOCIAL POLICYSOCIAL SECURITYTAX TREATMENTTELEVISIONTHREE-PILLAR SYSTEMWAGE GROWTHWORKERSYOUNG WORKERSWorld Bank10.1596/11317