PPK: Introduction of Employee Capital Plans (PPK) in the Company
Introducing Employee Capital Plans (PPK) in a company is an important step towards building sustainable retirement perspectives for employees. PPK, as a voluntary, private pension system, contributes to increasing financial awareness and provides the opportunity to save for the future.
An employer who hires employees and pays social security contributions for them in Poland is obligated to implement a PPK program in the company. Contributions to participants’ accounts come from three sources: the employer, the employee, and the state. Both the employer and the employee contribute basic payments to the PPK. Additionally, both the employer and the employee can declare additional (voluntary) contributions. The amount of contributions is calculated as a percentage of the employee’s total monthly gross earnings, which constitute the basis for calculating contributions to pension and disability insurance, as referred to in the Act on the Social Insurance System without limitation resulting from Art. 19 para. 1, and it amounts to:
- for the Employee – 2% of the salary value + voluntary additional contribution up to 2%;
- for the Employer – 1.5% of the salary value + voluntary additional contribution up to 2.5%.
In PPK, there is an automatic enrollment for individuals aged between 18 and 55; however, membership in PPK is voluntary. If an employee does not wish to participate in the program, they are obliged to submit a resignation statement to the employing entity in paper form.
To implement PPK in a company, it is necessary to select an appropriate financial institution in agreement with the employees, sign a management agreement, as well as an agreement for conducting PPK for employees within the appropriate timeframe, and then commence the contribution calculation.
