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November 2018
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Employee Capital Pension Schemes - a new challenge for employers

On 19 November the President signed the Act on Employee Capital Pension Schemes (PPK) which is to take effect on 1 January 2019. The Schemes offer a tool for boosting Poles’ pension savings. They are to be funded from contributions made by employees, employers and the State Treasury, the latter offering a welcome premium and some extra annual contributions. 


The Scheme is addressed to employees and is to be complementary to the general pension system.  In principle, the funds deposited in the Scheme are to be paid out once the participant turns 60.  The funds deposited in the Scheme are to be owned by the participants.


The Scheme is planned to be funded partly by the employer and partly by the employee. Additionally, the Act provides for contributions from the State Treasury, namely: an annual premium of PLN 240, and a one-time welcome contribution of PLN 250.

Who can benefit?

Participation in the scheme is to be voluntary for employees.  In reality, they will be enrolled in the scheme automatically, but they can resign from participation by making a relevant statement to their employer. Importantly, an employee who resigned from the scheme will be re-enrolled in it every 4 years unless they repeat the statement of resignation.


The automatic enrollment will apply to all workers below 55 years of age.  The Employer will be obliged to conclude a PPK agreement on behalf of a person who turned 55 at this person’s request only.  The scheme will not apply to those who are over 70 years old. 


The Scheme will have to be set up by each enterprise which employs at least one person who satisfies one of the following criteria:

  • is currently employed according to the Labour Code,
  • is a home worker,
  • is a member of an agricultural cooperative or a machinery ring,
  • is a natural person working on the basis of agency agreements or short-term job contracts or other contracts for services to which the provisions concerning short-term jobs apply,
  • is a member of a supervisory board remunerated for holding this function.

PPK – who pays?

The Act provides that the costs of participation in the Scheme are incurred by both parties to the employment relation.  The premiums are calculated on gross remuneration. The mandatory contributions can be increased by additional voluntary payments. 



For the employer, both mandatory and voluntary contributions to the PPK shall constitute deductible costs.  The payments will be exempt from contributions to retirement and disability pension insurance.


The employee’s contributions will be exempt from the tax on capital gains. However, if early withdrawal is made, the tax will be imposed, subject to the following assumptions:


Effective dates

The obligation to set up the Scheme will be spread in time, depending on the number of employees. The Act will take effect:

  • for entities which hire at least 250 people – on 1 July 2019
  • for entities which hire at least 50 people – on 1 January 2020
  • for entities which hire at least 20 people – on 1 July 2020
  • for other entities – on 1 January 2021

Obligations imposed on employers

Employers will be obliged to conclude two new types of agreements:

  • The PPK management agreement – with an institution which is to be responsible for accumulating and managing the PPK participants’ money
  • The PPK administration agreement – individual agreements on behalf of and for each of the Scheme participants.


The agreement for PPK management and, subsequently, the agreement for administration of the scheme should be concluded within three months of the effective date of the obligation to set up the scheme for the employer.


The employer will need to select the financial institution beforehand, in consultation with an in-house trade union, and in the absence of the latter – in consultation with the employees’ representatives.


Additionally, employers will be obliged to:

  • calculate the contributions to be provided for each participants and funded by the employer,
  • keep the PPK-related documentation,
  • manage the employees’ PPK-related instructions provided for in the Act,
  • monitor the employees’ age – the employing entity does not conclude the PPK agreement for people who have turned 70, but they must be informed of the possibility to conclude the same,
  • timely provide the participants, the PPK managing entity, and the supervisory bodies with certain information related to the PPK.                                                    

Exemption from the obligation to set up the Scheme

The Act provides for exemptions from the obligation to set up the Scheme. Exemptions will apply to those employers who already operate their own employee pension scheme (PPE) to which they contribute at least 3.5% of the employee’s salary, and where the PPE covers at least 25% of the overall number of employees. The exemption also applies to micro enterprises and entities which employ personnel but do not engage in business activities.



We are ready to assist you in implementing the Scheme and complying with each obligation in this respect. Please contact us if you wish to get more information.


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