Efficiency of private pension funds in Poland

The changing demographics in most European countries requires reform of their retirement systems in order to adapt them to the current situation. EU states' pension fund systems therefore have to undergo essential transformations. The primary reform of the pension system in Poland took place in 1999, when the one-pillar, pay-as-yougo system, was replaced by the three-pillar system: mandatory, pay-as-you-go pillar; mandatory, fully-funded pillar; and voluntary, funded pillar. However, the pension system in Poland was subject to government manipulation. The most important changes, concerning pension fund contributions and portfolio composition, came into effect in 2011 and 2014. The aim of this research is to analyze the efficiency of the pension funds operating in Poland in the period 1999-2013, by applying the Sharpe and Treynor ratios and comparing the pension fund performance to that of the benchmarks constructed to illustrate the changes to pension fund portfolio composition.