WARSAW, Sept 13 Poland may ban private pension
funds from investing in foreign sovereign bonds, a deputy
minister said on Friday, another step in a pensions overhaul
that has bruised Poland's image with investors.
Last week, Poland announced plans to transfer 121 billion
zlotys ($38 billion) in local bonds held by private pension
funds to the state and write them off to curb the public debt
and lower the general government deficit.
The private funds do not currently invest in foreign
government bonds, but some analysts had expected the funds to
explore this segment after the transfer of the local debt.
"We're thinking that we won't let pension funds invest in
treasuries of other countries," Deputy Finance Minister Wojciech
Kowalczyk told reporters, without giving further details.
The proposed transfer of Polish debt would leave the pension
funds, including global firms such as ING, Generali
, Allianz, Aviva with mainly equity
holdings worth some 111 billion zlotys in their portfolios.
However, Poland also plans to switch the remaining pension
savings of Poles to a state retirement fund unless individuals
indicate within three months they would rather keep them with
the private funds.
By preventing the funds from investing in fixed-income
products other than corporate bonds, analysts said their
portfolios could become more volatile which would limit the
number of Poles keeping their holdings in private hands.
"I would not bet on a lot of people staying in OFE (private
funds). Many would consider it as too risky," said Piotr
Bielski, senior economist at Bank Zachodni WBK.
Poland has a hybrid pension system at the moment. Mandatory
contributions are made into both the state pension vehicle, and
the private funds.
($1 = 3.1653 Polish zlotys)
(Reporting by Pawel Florkiewicz, Writing by Dagmara Leszkowicz;
Editing by Toby Chopra)