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Poland says plans to convert OFE pension funds into mutual funds

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Poland says plans to convert OFE pension funds into mutual funds. Poland plans to convert state-guaranteed OFE private pension funds into mutual investment funds that will manage 103 billion zlotys ($26 billion) worth of assets, economy minister Mateusz Morawiecki said on Monday.

The remaining 35 billion zlotys now held by the OFE pension funds are to be transferred to the state-run demographic reserve fund, Morawiecki said.

The economy ministry has scheduled a news conference for 0630 GMT on Monday, to be attended by economy minister Mateusz Morawiecki and Pawel Borys, chief executive at Polish state fund PFR.

The ministry gave no further detail, but the announcement came a day after Jaroslaw Kaczynski, leader of the ruling Law and Justice (PiS) party signalled new plans for the assets held by local pension funds, known as OFEs.

“The conference will concern the OFEs as well as government plans for the pension system and how to spur the need for higher savings,” one source with knowledge of the matter said.

Another source confirmed that pension funds will be on the agenda, but neither source would either confirm or deny that the state plans to seize 100 billion zlotys ($25.2 billion) of stocks held by OFEs.

Representatives of both the economy ministry and state fund PFR were not immediately available for comment.

OFEs, created in 1999 as part of an overhaul of the retirement system, were intended to provide a savings plan to complement pensions paid out by the state.

Poland’s conservative government has said that it has no plans to plunder pension funds’ shares, but Kaczynski’s latest announcement said that their assets “could be a basis for new, important ventures” and “could build the power of our economic policy”.

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