Employee Capital Plans
Pracownicze programy kapitałowe, PPK
Coverage
Automatic enrolment
- All employed persons between the ages of 18 and 54.1
Opting out
- Participants can opt out from the scheme by written request but are automatically re-enrolled every four years.
Opting in
- All employed persons between the ages of 55 and 69.
Financing
General finances
- Fully funded personal pension plans based on contribution payments (incl. state allowances) and capital revenues.
Contribution rates
- Minimum basic contribution: fixed share of monthly gross earnings (3.5%), shared between employer (1.5%) and employee (2%).
- Additional voluntary contributions: proportions vary (maximum amount: up to 2.5% paid by employer and 2% by the employee).
State support & incentivising strategies
- State subsidies including a start-off allowance of PLN 250 for each participant; an annual state subsidy of PLN 240 if the amount of paid minimum basic and additional contributions is at least equal to the amount of basic contributions due from 6 minimum salaries.
- Monthly contribution payments of the employer are tax-exempted.
- The incomes from the investment activities of the funds which are then placed in the individual accounts are not taxed.
Administration
- Different finance institutions chosen by the employer: general pension societies, investment fund companies, employee pension societies, insurance companies.
- The ‘Polish Financial Supervision Authority’ (Komisja Nadzoru Finansowego) regulates licenses, oversees and sanctions the pension schemes.
Qualifying Conditions
- Employee entitled to occupational pension benefits at a minimum age of 60 years.
- Employee is entitled to occupational pension benefits before age 60 in case of serious illness in the family (household member, spouse or child).
Benefits
Pension payments
- Defined contribution, primarily based on the amount of contributory earnings, length of contribution period and capital revenues.
- Monthly annuity or one-time lump sum payment.
Taxation and social security contributions
- Payments are not subject to income tax if paid at age 60 or after in the amount of: 120 monthly instalments; one-off withdrawal of up to 25% of accumulated funds and subsequent payments of the remaining 75% over 120 monthly instalments (other payment arrangements are subject to capital gains tax).
- Pension payments are not subject to social security contributions.
Coverage
Financing
Administration
Qualifying Conditions
Benefits
Automatic enrolment
- All employed persons between the ages of 18 and 54.1
Opting out
- Participants can opt out from the scheme by written request but are automatically re-enrolled every four years.
Opting in
- All employed persons between the ages of 55 and 69.
General finances
- Fully funded personal pension plans based on contribution payments (incl. state allowances) and capital revenues.
Contribution rates
- Minimum basic contribution: fixed share of monthly gross earnings (3.5%), shared between employer (1.5%) and employee (2%).
- Additional voluntary contributions: proportions vary (maximum amount: up to 2.5% paid by employer and 2% by the employee).
State support & incentivising strategies
- State subsidies including a start-off allowance of PLN 250 for each participant; an annual state subsidy of PLN 240 if the amount of paid minimum basic and additional contributions is at least equal to the amount of basic contributions due from 6 minimum salaries.
- Monthly contribution payments of the employer are tax-exempted.
- The incomes from the investment activities of the funds which are then placed in the individual accounts are not taxed.
- Different finance institutions chosen by the employer: general pension societies, investment fund companies, employee pension societies, insurance companies.
- The ‘Polish Financial Supervision Authority’ (Komisja Nadzoru Finansowego) regulates licenses, oversees and sanctions the pension schemes.
- Employee entitled to occupational pension benefits at a minimum age of 60 years.
- Employee is entitled to occupational pension benefits before age 60 in case of serious illness in the family (household member, spouse or child).
Pension payments
- Defined contribution, primarily based on the amount of contributory earnings, length of contribution period and capital revenues.
- Monthly annuity or one-time lump sum payment.
Taxation and social security contributions
- Payments are not subject to income tax if paid at age 60 or after in the amount of: 120 monthly instalments; one-off withdrawal of up to 25% of accumulated funds and subsequent payments of the remaining 75% over 120 monthly instalments (other payment arrangements are subject to capital gains tax).
- Pension payments are not subject to social security contributions.
1 For the employer it is mandatory to provide insurance for their employees in the PPK, if no other options for occupational pension insurance (i.e. PPE) are provided. PPK plans do not have to be implemented, if at least 25% of the employees in the given enterprise have joined the PPE and the employer contributes at least 3.5% of remuneration to the PPE.
Legal Basis: Occupational Capital Plans Act (ustawa o pracowniczych planach kapitałowych).