Poland's new system of voluntary, employer-sponsored pension plans kicked in on Monday, offering a fresh option for citizens to save for retirement.
To begin with, the new system is taking off in large companies with at least 250 employees.
The new pension programme has come into effect after Poland’s president signed it into law in November.
President Andrzej Duda voiced hope at the time that employer-sponsored pension plans would help improve the finances of future pensioners while injecting much-needed capital into the economy.
Prime Minister Mateusz Morawiecki has said that the new Employee Capital Pension System (PPK) will be another social assistance programme launched by his conservative government to ensure the financial security of families. Paweł Borys, CEO of the Polish Development Fund (PFR), a state-run investment vehicle, has said that the programme is designed to increase the pension savings of the public, while helping stimulate the economy.
Under the new system, employers will contribute the equivalent of at least 1.5 percent of employees' gross wages to individual retirement savings accounts every month.
Employees will in most cases be required to contribute no less than 2 percent of their gross monthly wages, and the government will make a supplementary contribution of PLN 240 every year, in addition to a one-off welcome payment of PLN 250. The new system will take effect in stages beginning this Monday and be fully up and running nationwide by January 1, 2021.