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Making Sense of Pension Reform

WARSAW – Pension reform has become one of the most troubling fiscal dilemmas facing developed countries, especially those with a shrinking workforce and an aging population. The issues are both complex and controversial, while seeming quite dull to much, if not most, of the public. As a result, serious discussion is too often hijacked by those with an ulterior motive.

Consider the intemperate responses to recent proposals by Poland’s government to resolve its pension system’s problems. The proposals have been disparaged as the “nationalization of private assets,” a “pension swindle,” and “an asset grab worthy of Lenin or Stalin.” In fact, the reforms are a sensible and sustainable response to the fiscal squeeze that many other developed (and some developing) countries are facing.