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Experts skeptical of Poland's plan to lower retirement age

Associated Press Associated Press 16/11/2016

WARSAW, Poland — Poland's lawmakers reversed course on Wednesday and approved a bill that lowers the minimum age for retirement despite questions about financing the new system.

The lower house voted 262-149 with 19 abstentions to allow women to retire at the age of 60 and men at age 65 starting in October 2017.

Under the current system, adopted as a fiscal reform measure in 2012, the threshold is being gradually raised to 67 for both sexes. The previous government in the aging nation had argued that Poles need to work longer to secure themselves sufficient pensions.

Prime Minister Beata Szydlo assured lawmakers on Wednesday that there will be enough public money to subsidize earlier pensions, chiefly coming from more efficient tax collections.

"Our government has kept the promise, and we will continue to implement the reforms that the Poles are waiting for," Szydlo said in Parliament before the vote.

Lowering the retirement age was a key electoral promise of the conservative Law and Justice party, which took power a year ago and is pursuing a policy of social benefits.

But economists said the plan isn't viable. The latest economic data show slowing growth and a weakening of the Polish currency, the zloty.

"Poland cannot afford it," Christopher Hartwell, president of the Center for Social and Economic Research, said.

"I don't know where the government is going to get the money for this," Hartwell said, expressing skepticism about Szydlo's claim that the government would rely on more tax income.

He said the move is "popular," but makes "no fiscal sense" and "no economic sense."

Deputy Prime Minister Mateusz Morawiecki, who oversees economic policies, suggested Wednesday that the government would use incentives to encourage people to continue working beyond the lower retirement ages, both to benefit Poland's economy and the size of their pensions.

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This story has been corrected to show expert said the reform makes "no fiscal sense" instead of makes "fiscal sense."

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