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PPK in Poland - voluntary or obligatory for companies?

In 2020, employee capital plans (PPK) will be implemented in Poland in companies employing less than 250 people.

A PPK is an additional long-term pension savings system for employees. In this system, contributions are paid by both the employee and the employer.

The system is voluntary for employees - each employee can decide to join a PPK. On the other hand, an entrepreneur who hires employees must introduce a PPK in the company. There are exceptions to this rule. A PPK need not be introduced by companies that already have similar schemes in place (so-called employee pension schemes). Also micro-entrepreneurs, i.e. entities employing less than 10 people, are exempt from introduction of a PPK if their net turnover or total assets do not exceed EUR 2 million at the same time - if all employees of the microentrepreneur in question waive a PPK.    

From January 2020, companies employing at least 50 people are obliged to introduce a PPK. The deadline for companies employing at least 20 people to introduce a PPK is 1 July 2020. Companies employing fewer people can wait until 2021. However, it should be remembered that these numbers include not only employees but also some persons that provide services but are not employees, for whom a PPK should also be introduced – like for employees, if they decide to join.

Introducing a PPK involves a number of administrative obligations for companies - first of all, choosing a managing financial institution and concluding a management contract as well as contracts to run the PPK on behalf of employees. Both of these contracts should be concluded within approximately 4 months after the date set for introduction of a PPK. So, for example, companies with 50 to 249 employees and a deadline of 1 January 2020 for introduction of a PPK conclude these contracts in late April and early May 2020.

For each employee who decides to join a PPK, the company pays a contribution of 1.5% of their salary - obligatory. A further maximum of 2.5% may be paid voluntarily. An employee who decides to join a PPK pays 2% of their salary obligatorily and up to 2% voluntarily.

However, the cost for the company is not only the above percentage of remuneration, but also the administrative costs related to implementing and managing the system plus implementing appropriate IT and HR solutions.

 

Source: Act on employee capital plans, 4 October 2018. (Journal of Laws of 2018, item 2215)