28.04.2021

Although the OFE reform is supposed to enter into force in a few weeks, a lot of its details are still questionable. One of them being the time that Open Pension Funds (OFE) will have to receive and process correspondence from clients who want to transfer funds to ZUS (Social Insurance Institution). Sejm (a part of the polish parliament) being unpredictable, deepens the uncertainty about the date of its implementation. Experts from ArchiDoc, a company dealing with mass processing of data and documents, are worried about the tight deadlines.

Another pension reform planned in Poland involves a removal of Open Pension Funds (OFE) and a transfer of the funds to Individual Retirement Accounts (IKE). At the same time, a tax of 15% will be collected, but in return the collected funds will be inherited. Those who do not agree to this transfer may transfer their funds to the Social Insurance Institution (ZUS) – the pension for these people will be paid for life, and the tax will be collected only upon receipt of the benefit. These funds will not be inherited.

At first glance it seems simple: those who want their funds transferred to ZUS must send a declaration to the OFE in which they open an account. This is where the problems begin. Willing people only have 2 months to do so, in addition during the holidays. A lot of people don’t remember in which open pension funds they have their funds accumulated. Besides, they can only do it in the form of a paper document that needs to reach the OFE by November 29, where it has to be read and processed. On this basis, the OFE must redeem components of the investment portfolio and transfer funds to ZUS on December 1. Which in a lot of cases gives the OFE just one day for carrying the entire process.

Race against the time
– Insurers and investment companies running OFE are not able to perform such tasks on their own. They don’t maintain a large team of skilled workers just for the sake of this one-off task. Entities such as ArchiDoc are able to do this work successfully, however they need time to prepare. We have been designing a solution with our partners for a year, ever since the government made its first attempt at the reform. Some parts of the OFE are just settling tenders and there is great uncertainty. – says Konrad Rochalski, president of ArchiDoc and managing director of the OASIS Group in Poland.

The recent sudden removal of the vote on this issue from Sejm’s agenda further aggravates the uncertainty.

– We take into consideration that the delay in adopting the act will further shorten the already tight deadlines – adds an expert.

How many Poles will choose ZUS?
The question is how many citizens will decide to receive pensions from ZUS in the future, and thus the scale of the task facing open pension funds. In another pension reform important for the government – the establishment of Employee Capital Plans – at the end of 2020, 70 percent. employees of companies in which the Plans were properly implemented decided to send a letter of resignation. Despite the fact that staying in the PPK (Employee Capital Plans) is associated with subsidies to the future pension from employers and the state.
At the moment there are 15,54 mln members in OFE. If half of them decide to go for ZUS, assuming that the declarations will be sent constantly for 2 months, 200,000 letters will have to be handled, unpacked, sorted and substantially handled on a daily basis. This means that the OFE would need several hundred employees to be able to carry out this process.

– This is just one of the cases. We talk to many OFEs. We have several models ready, that we have worked on for over a year. In recent years, we have faced several similar challenges by creating teams of up to 300 people in just a few weeks. We anticipate that most of the declarations will be received a few days before the deadline and we have to be prepared for it – explains Konrad Rochalski.

Acceleration? Paper is the enemy
Technology might help, however, an expert points out that due to the lack of the final form of the act, OFEs waited to carry out their programming work. They would make it possible to use existing databases and customer registers at the disposal of Open Pension Funds. As a result it would reduce the time needed to process a single declaration. To this day it is not known whether the legislator will allow electronic filing of the declarations, which could speed up their processing. If the law comes into force on June 1, the developers will not be able to complete their work in time.

– We could use the OCR technology, which allows automatic recognition of print in paper documents. However, we need to have time to configure it. We will start when we know the final shape of the regulations. Admitting only the paper form generates another complication. Paper declarations filled with handwriting are difficult to automate and more time is needed for their manual analysis – says Konrad Rochalski.