Every 4 years
all those who opted out from PPK are enrolled again. It applies to employees between 18 and 55 years old.
Until the end of February 2023
your resignation was valid. If you submit another resignation after this date, it will expire at the end of February 2027, and so on.
On March 1 this year
the first auto-enrollment in PPK took place. Then your employer concluded on your behalf an agreement for running the Employee Capital Plan with a financial institution.
In PPK you save 2x faster
By default, you contribute to your PPK the equivalent of 2% of your gross salary. The employer adds the equivalent of 1.5% of your salary. And the state tops up your account with a welcome amount of PLN 250 and PLN 240 every year.
In practice, to each PLN paid by you, your employer and the state add the other one.
Look, if you earn e.g. PLN 5,000 gross per month, you will accumulate PLN 2,590 in the first year. Of this amount:
- PLN 1,200 will be deposited by you. That is the equivalent of 2% of your 12-month gross salary,
- PLN 1,390 will be deposited by your employer and the state (equivalent of 1.5% of your gross salary + PLN 490 subsidies from the state).
Employer contributions and state subsidies are a profit for PPK participant. Thanks to them, you will accumulate money much faster than by putting aside the equivalent of your payment to the plan just on your own.
PPK means additional savings. Not only for retirement.
It’s true that taking money from PPK after the age of 60 is the most beneficial. However, you can use the money earlier without giving a reason. Just remember that:
- the withdrawal money will be reduced by subsidies from the state,
- 30% of what the employer paid will be added to your pension capital in ZUS,
- Income tax must be paid on the extra money that the fund generates.
However, you can withdraw money from PPK earlier without having to pay tax:
- in the event of a serious illness of yourself, your spouse or your child (up to 25% of funds in PPK, no obligation to return),
- to cover own contribution for the purchase of an apartment or construction of a house (up to 100% of funds, with the obligation to return this amount to PPK in the future. This option is available to participants who are under 45 years of age).
For example, if you earn PLN 5,000 gross, then in the default version:
- Your monthly contribution is 2% of this salary (PLN 100)
- Your employer adds the equivalent of 1.5% of your salary (PLN 75) to this
Together with state subsidies, you will accumulate PLN 2,590 during one year.
PLN 147 000
such amount would be transferred to your PPK account in 30 years of saving by you, your employer, and the state.
This amount could be even higher. Money in PPK is invested on financial markets in Poland and abroad. It’s about getting them to work. The stock and bond markets can fluctuate a lot, just like after the outbreak of the pandemic. However, in a sufficiently long time, PPK participants can benefit from a simple fact - with small breaks, the world is constantly developing, and along with it the value of well-managed, global investments increases.
You can read more about how this money is invested and what are the potential risks and costs in the Q&A section below.
FACT: The money in PPK is the private property of the participants
MYTH: PPK is the second OFE (Open Pension Funds)
FACT: Participation in PPK slightly reduces the net remuneration
With PPK, you will collect private savings for the future.
Think carefully if you want to opt out.
Take into account that:
● state pensions are getting lower and lower.
● today’s 65-year-olds live on average more than another 16 years (data from the Polish Central Statistical Office).
● you need about PLN 1 million in savings to pay yourself an additional PLN 5,000 per month for 16 years.
Over 3 million people are already participating in PPK.