The main goal of the paper is to portray the situation of older respondents with paltry pensions and analyze it in the context of their biographies. Starting from the changes in the institutional system, we employ the framework of individualization of risk and responsibility to present the results of our empirical study.
The most important reform of the Polish general pension system in the last decades was introduced since the beginning of 1999. One of the fundamental changes was a transition from the defined benefit (DB) system to the defined contribution (DC) system. The latter, also referred to as a “capital-based system,” is characterized by the fact that the amount of the received retirement benefit is closely linked with the amount of contributions paid to the system in the past by a particular person. In consequence, in recent years there have appeared press reports about extremely low, “paltry pensions”. In December 2021, the number of people receiving a pension lower than the minimum (1,250.88 PLN at that time) was 337.6 thousand, and they constituted 9.5% of all the “new-system” pensioners. Moreover, during the reform, two additional pillars were established in which the money of future pensioners was to be managed by private companies/institutions.
Referring to Ulrich Beck’s terminology, we may say that this change meant pension individualization and privatization – the responsibility for future retirement benefits has been largely shifted from the state to individuals and private entities. This change is convergent with other changes often understood as “dismantling” the welfare state such as labor market deregulation or privatization of health care.
In spring 2022, we conducted a small research project that was part of the seventh wave of the Polish Panel Survey, POLPAN. We used survey data to identify respondents receiving retirement benefits below the minimum state pension and contacted them to conduct qualitative biographical interviews. In this paper, we aim to describe the life situations behind the fact that some POLPAN respondents receive “paltry pensions.” We also point out what biographical solutions the respondents have found to be able to make ends meet and retain a sense of dignity, how they evaluate their past and present lives, and how they assess their institutional environment. We discuss the perceived source of the current situation and justifications.