Statutory Old Age Pension Scheme

Mandatory insurance

• Employees.
• Specific groups of economically active persons, such as the self-employed and civil servants.
• Specific groups of economically inactive persons, such as parents during child-raising periods and home caregivers, claimants of income replacement benefits incl. recipients of sickness benefits, injury benefits, transitional allowances and unemployment benefits.

Exempted

• Judges, public prosecutors, professional soldiers, officers (police forces, intelligence agencies, customs and tax services, and others).

Voluntary insurance

• All persons not compulsorily insured in the statutory old age pension scheme.

General finances

• Mainly PAYG-financed from insurance contributions.
• Partly tax-financed out of the general budget.

Contribution rates to mandatory insurance

• Fixed share of monthly gross earnings (19.52%) with contribution assessment ceiling.
• Contributions shared in parity between employer (9.76%) and employee (9.76%).
• Self-employed: fixed share (19.52%) of fixed contribution base (60% of national average wages).
• The insured person can choose whether to contribute parts of the mandatory insurance contribution (2.92%) to the OFE (see open pension funds, OFE).

• The ‘Social Insurance Institution’ (Zakład Ubezpieczeń Społecznych,  ZUS) manages the scheme and pays benefits directly to the person.

Qualifying conditions

• Standard old age pension: statutory retirement age is 60 for women and 65 for men without a specified minimum insurance period.
• Special conditions apply to miners, railway workers, teachers, some civil servants and persons with disabilities.
• Minimum pension: a minimum pension benefit is granted to persons whose income falls below the minimum pension level (100% pension-tested); retirement age is 60 for women and 65 for men; minimum insurance periods: 20 years for women and 25 years for men.

Early retirement

• No possibilities for early retirement for persons born after 31/12/1948.

Deferred retirement

• Retirement can be deferred with positive (permanent) adjustments to pension benefits.

Combining employment & retirement

• Termination of employment (regardless of the amount of income) is a precondition for claiming pension benefits.
• After retirement new employment is permitted with earnings limits: in case income is higher than 130% of the average salary, the right to pension is suspended; in case income is higher than 70% of the average salary, the pension is proportionately reduced.

Pension benefits

• Notional defined contribution based on the contributions accumulated in the notional account.
• No maximum amount specified; maximum pension benefit levelled due to contribution assessment ceiling¹.

• Minimum pension: PLN 1,200 in 2020 (PLN 1,250.88 in 2021); for persons with a calculated pension income below the minimum pension threshold, subject to compliance with specific qualifying conditions.

Benefit calculation

• Sum of contributions after 1998 in addition to the valorisation of the initial funds associated with the older defined-benefit account, divided by average life expectancy in months.
• Adjustments: yearly adjustments of benefits according to adjustment ratio based on the annual consumer price index and growth of average earnings.²

Taxation and social security contributions

• Pension benefits are subject to income tax.
• Mandatory contributions for health insurance.