Poland’s occupational pension system set to expand
More Poles will be able to boost their retirement nest eggs after the country’s occupational pension system expands next month.
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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) will expand to cover businesses that had fewer than 20 workers as of December 31, 2019 or began operating after that date.
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 the programme is designed to increase the pension savings of the public while helping stimulate the economy.
Under the Employee Capital Pension 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 system is taking effect in stages and is expected to be fully up and running nationwide by the middle of next year.