WARSAW (Reuters) - A former Polish prime minister and a central bank policymaker joined critics of the government's overhaul of the pension system, rejecting the plan on Friday as "harmful for the economy" and "makeshift".

Poland said on Wednesday it would transfer 121 billion zlotys ($37 billion) in bonds from privately-managed pension funds to the state and cancel them to reduce public debt.

Jerzy Buzek, who headed the European Parliament from 2009-2012 and was Poland's prime minister when it introduced the current pension system in 1999, said: "The proposal is harmful for the Polish economy."

In a letter also signed by central bank rate-setter Jerzy Hausner and published on Buzek's Twitter account, they said the changes "will temporarily help to lower the budget deficit, but in the longer term guarantees neither a sustainable improvement in the state of public finances, nor economic security for the insured."

Buzek is a prominent politician of Tusk's Civic Platform party and his words underline divisions within the ruling coalition over the plan, which has sent the Warsaw bourse tumbling and raised protests from the funds and some economists.

For the past 14 years, Poland has had a hybrid pension system, with part of workers' contributions diverted from the state pay-as-you-go system to private pension funds, known collectively as the second pension pillar.

Prime Minister Donald Tusk's government said this system was too costly for public finances and failed to deliver additional benefits for future pensioners. He said the changes should make pensions safer.

Buzek and Hausner called the government's justification of the changes "dishonest".

"We are aware of the risks stemming from the state of public finances, which requires serious discussion and comprehensive and long-term action, not makeshift moves," Buzek and Hausner wrote.

(Reporting by Marcin Goettig; Editing by Ruth Pitchford)

 

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