The legislation was thoroughly consulted with employers and employees’ representatives, trade unions included, and to a great extent was modelled on the British private pension schemes system. BPCC members had the chance to gain insights into the pension schemes reform from Aviva Investors, an insurance company with vast experience from the UK market.
The Employee Capital Pension Schemes are based on two principles: they are common and voluntary. The law foresees that every person that remits contributions to the Social Security Authority (ZUS) will be included in the schemes, regardless what kind of work contract they have with their employer. The only group that can remain outside of the system are sole proprietors and microbusinesses to nine employees (provided that all the employees agree not to enter a PPK). Other than this, every employer has an obligation to sign up all persons employed (regardless of job contract type), under the age of 55 (older employees can sign up voluntarily). Depending on the size of the company this is a binding rule as of 1 July 2019 for companies with 250+ employees; for companies employing 50-249 employees the date is 1 January 2020; for those with 20-49 employees it is 1 July 2020, and for the micro-employers with between 1 and 19 employees it is 1 January 2021 (assuming that those with up to nine employees have no objections to entering the PPK).
The legislation gives every employee the right to resign from the PPK, or return to it at any moment. Additionally, every four years employees will be automatically signed up again.
The monthly contribution to a PPK will be divided between the employer and employee and each can pay a basic amount or raise it to a higher level. If both parties choose the maximum deductions, the overall contribution can amount to 8% of the remuneration. The State Treasury will also contribute a welcome premium of 250 złotys and an annual premium of 240 złotys. The Ministry of Finance estimated that 11.5 million employees will be covered by the scheme, and the annual contributions may sum up to 15-33 billion złotys. The money will be operated by investment funds according to strict rules foreseen by the legislation.
The aim of the PPK programme is to raise pensions through a capital component thus improving the quality of life throughout many years of retirement, therefore the scheme does not allow a withdrawal of all collected means when retiring. Aviva experts presented some scenarios that enable earlier partial withdrawals. They underlined as well that there are certain guidelines enhancing the safety of the PPK contributions invested on the capital market – the older the PPK participants are, the safer financial instruments should be chosen.
Between October and December, Aviva Investors experts have led eight policy group meetings for BPCC members across six cities (Warsaw, Poznań, Rzeszów, Wrocław, Opole, Kraków), outlining the obligations for employers, comparing the PPK with private pension schemes (Polish: PPE) and listing the possible consequences of PPK introduction in other areas, for example technology deployment within a company. Aviva Investors pension schemes experts are happy to continue advising BPCC members on the matter in the New Year.