Poland’s occupational pension system expands
Poland last year launched a new system of voluntary, employer-sponsored pension plans (the so-called Employee Capital Pension System or PPK) to offer a fresh option for citizens to save for retirement. Initially, the new system covered companies with at least 250 employees. With the coming of the new year, PPK has been expanded to cover businesses with more than 50 workers, Polish Radio repots.
The new pension program came into effect after it was signed into law by President Andrzej Duda in November 2018. Paweł Borys, CEO of the Polish Development Fund (PFR), has said that the program is designed to increase the pension savings of the public, while helping stimulate the economy.
Borys told Polish Radio that employer-sponsored pension plans were expected to eventually attract seven-to-eight million citizens. As of mid-December that number stood at 1.3 million, with the participation rate at 41%, according to Borys.
Under the new system, employers contribute the equivalent of at least 1.5% of employees’ gross wages to individual retirement savings accounts every month.
Employees are in most cases required to contribute no less than 2% of their gross monthly wages, and the government makes a supplementary contribution of PLN 240 (some EUR 56.70) every year, in addition to a one-off welcome payment of PLN 250.
The new system is taking effect in stages and will be fully up and running nationwide by January 1, 2021, Polish Radio added.
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