Poland last year launched a new system of voluntary, employer-sponsored pension plans (PPK) to offer a fresh option for citizens to save for retirement. To begin with, the new system took off in large companies with at least 250 employees.
With the coming of the new year, the Employee Capital Pension System (PPK) expanded to cover businesses with more than 50 workers. The new pension programme came into effect after it was signed into law by Poland’s president in November 2018.
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.
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.
Borys told public broadcaster Polish Radio last month that employer-sponsored pension plans were expected to eventually attract 7 to 8 million citizens. As of mid-December that number stood at 1.3 million, with the participation rate at 41 percent, according to Borys, whose Polish Development Fund oversees the country’s Employee Capital Pension System.
Under the new system, employers contribute the equivalent of at least 1.5 percent of employees' gross wages to individual retirement savings accounts every month. Employees are in most cases required to contribute no less than 2 percent of their gross monthly wages, and the government makes a supplementary contribution of PLN 240 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.