Poland: Automatic enrolment for retirement plans – employee capital plans came into force on 1 January 2019

Posted on 3rd January, 2019

Estimated reading time 3 minutes

The Employee Capital Plan (PPK), a long-term savings programme to give employees additional security in retirement, generally involves new obligations for employers. The programme, which came into force on 1 January 2019, will also incur additional costs that should be taken into consideration when planning budgets.

PPK was stablished in cooperation between the Polish government, the Polish Development Fund, employers’ organisations and trade unions, regulated by the Act of 4 October 2019.

The programme, targeted at over 11 million employees, automatically includes all employees between the ages of 18 to 54 who the employer currently pays pensions contributions to. It is financed predominantly by employers, employees and the state.

What action is required, and by when?

While the Act came into force on 1 January 2019, the obligation to create a PPK will be introduced gradually. This will be in four stages, depending on the number of eligible persons in a given unit:

  • from 1 July 2019 for companies employing at least 250 eligible persons (as at 31 December 2018)
  • from 1 January 2020 for companies employing from 50 to 249 eligible persons (as at 30 June 2019)
  • from 1 July 2020 for companies employing from 20 to 49 eligible persons (as at 31 December 2019)
  • from 1 January 2021 for the other employers.

The new system is universal. Alongside enrolling employees into PPK, employers are obligated to enrol:

  • Persons who perform work under civil law agreements (mandate agreements, agreements on the provision of services, agency agreements)
  • Persons who perform work under tolling agreements
  • Supervisory board members who perform their function for a consideration, and
  • Members of agricultural production cooperatives and farmers’ association cooperatives.

This is provided that these persons are over 18 years of age, and are subject to mandatory retirement and disability insurance in the Republic of Poland in the above-mentioned respects.

In order to implement and operate PPK, the employer is obligated to conclude:

  • a PPK management agreement with a financial institution (in consultation with employee representatives)
  • in the name and on behalf of each PPK participant, a PPK operation agreement with a financial institution. This must be no later than 10 days after the expiry date, which is three months from the day of entering into a legal relationship with a given person; or from the day the obligation to create the PPK arose (applicable to persons who as at the day the said obligation arose were already employed by the employing entity)
  • deduct and pay contributions monthly.

What penalties apply for non-compliance?

Pursuant to the Act, the employer’s failure to fulfil its statutory obligations (including a failure to create a PPK or inducing employees to opt out of saving in a PPK) constitutes an offence subject to a fine of up to PLN 1,000,000 (approximately EUR 25,000). Alternatively, some limited cases specified in the Act, an amount up to 1.5% of the given employing entity’s total payroll in the financial year preceding the commission of the offence.




For further information or to discuss any of the issues raised, please contact Karolina Kanclerz (karolina.kanclerz@skslegal.pl) on +48 71 346 7705 at Sołtysiński Kawecki & Szlęzak – www.skslegal.pl.