As part of the creation of an additional pension protection system, employers are obliged to create an Employee Capital Plan (PPK).

The obligation to conclude PPK management contracts will be introduced gradually. For example, entities employing as of December 31, 2018, at least 250 people, will be covered by the above obligation from July 1, 2019, and entities employing less than 20 people as of December 31, 2019 only from January 1, 2021.

Employers are obliged to create a PPK for all persons employed (e.g. employees on a full-time basis and employed on a contract-mandate). For employees, participation in the PPK is voluntary. Payments made to PPK will be financed from own resources by the employer and the participant. The basic payment to the PPK financed by the employer will amount to 1.5% of the remuneration, but he will be able to declare making an additional payment to the PPK, in the amount of up to 2.5% of remuneration. The participant’s payments are, as a rule, respectively: 2% basic payment and up to 2% additional payment

Basic and additional payments (financed by the employer) will be taxable for the employee. Payments made to the PPK financed by the employer will not be included in the remuneration constituting the basis for determining the amount of compulsory contributions for pension and disability insurance. Payments to the PPK made by the employing entity are a deductible cost for this entity.

The welcome payment and the annual subsidy to the PPK financed by the state are exempt from personal income tax. The income from participation in PPK and transfer withdrawals will also be exempt from the personal income tax.

⇒ Exceptions:

The entities with an Employee Pension Program with an employee share of at least 25% and a minimum premium amount of 3.5% as well as the micro-entrepreneurs are not required to maintain the PPK if all of their employees resign from running a PPK.

⇒ Note:

The employer must start preparations in advance in order to introduce the PPK within the statutory deadline, inter alia, sign a contract with an entity managing the PPK. It should be noted that the selection of such entity must be consulted with the employees’ representatives.