Assessment of the efficiency of the Polish pension system using the synthetic index method in the years 2011–2023

Abstract

This study aimed to assess the efficiency of the Polish universal pension system from 2011 to 2023. We focused on three key areas: financial stability, the system's capacity to ensure a dignified life for retirees, and its success in combating poverty among seniors. Our initial hypothesis suggested a decline in the system's efficiency over this period. To evaluate this, authors used statistical data analysis and literature reviews. A synthetic effectiveness indicator was developed from data provided by the Central Statistical Office (GUS) and the Social Insurance Institution (ZUS). This indicator comprised five specific metrics: benefit coverage by contributions, the replacement rate, retirees' subjective assessment of their financial situation, the percentage of pensions below the minimum, and the proportion of retirees living below the statutory poverty line. Our analysis disproved the initial hypothesis, revealing a clear increase in the efficiency indicator. While this growth was not linear, it peaked in 2016, influenced by numerous legal reforms. The system showed the highest effectiveness in financial stability, moderate success in providing decent living conditions, and the lowest in reducing poverty. To maintain or improve effectiveness, significant reforms are essential, particularly raising the retirement age and strengthening the third pillar of the pension system.