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Employee Capital Plans

 From January 1, 2019 in Poland came into force a new law on PPK (Employee Investment Plans), which provides for a new type of pension saving. The PPK system was implemented in stages, depending on the number of employees, and from January 1, 2021, affected all companies that operate on the Polish market and have employees. Small entrepreneurs must sign management agreement of PPK until April 23 with the selected financial institution, and a contract for running PPK until May 10, 2021.

 What is PPK?

PPK is a voluntary and private system of long-term saving, in order to improve the financial security of employees by saving on the PPK account. The PPK account works as well as the deposit in the bank. The funds will affect the account from three sources: from the employer, from the employee and from the state (one-tie PLN 250  then every year after meeting certain conditions, the employee's account will be replenished with the amount of PLN 240). All officially employed persons between the ages of 18 and 55 automatically join the programme, regardless of the form of employment. Persons from 55 years to 70 years will have to submit a written application to join the program. Member may resign from the program by submitting a written application to the employer. However, the project assumes the possibility of joining the program at any time.

Payments to the PPK account are contributions to the pension insurance. In this case, the employee must deduct 2% of salary, and the employer-1.5%. There are also additional contributions that you can make on a voluntary basis. At the same time, within a month, the PPK account may receive from 3.5% to 8% of salary. If a worker has a monthly salary equal to or less than 120% of the minimum wage in the current year, he may pay a contribution of 0.5% of the salary.

The funds accumulated in the PPK program will be paid to the employee after the age of 60 (for both men and women). No tax will be charged. Also provides for the possibility of paying 25% of savings in the event of a serious illness of a PPK participant, his spouse or children.

If the employer does not resign from the program, he will have to register the employee in the PPK and start the payment. If you have a company in Poland or a business activity with employees, be ready to start registration in the PPK system. The contract for the management of the PPK fund shall be concluded between the employer and the financial institution of his choice. The employer may choose any financial institution, provided that it is admitted to the scheme. A list of such institutions can be found on the PPK website .

The admission of a foreigner to the PPK program will be considered as an additional argument when considering an application for a permanent residence permit in Poland. In accordance with Article 117 of the law on PPK of 4 October 2018, employees the Office for Foreigners will have access to the list of accounts in the program and will be able to check whether the applicant is a participant in the program. Having an account will mean that the foreigner began to save for retirement, which indicates the intention to stay in Poland.

The PPK system does not include a person who conducts individual business activities until he has no employees, and a small entrepreneur, to whom all employees have submitted a refusal application.