Poland launches new PPK auto-enrollment retirement savings plan 

The date from which implementation is mandatory will depend upon the number of employees employed by the entity:

Employees aged between 19 and 55 will be automatically enrolled into the plan, with employers and employees contributing at least 1.5% and 2% of covered salary respectively.  Employers and employees have the option of contributing up to 4% of salaries each. 

Employees may opt out of the plan, but we understand that the intention is there would be periodic auto-enrollment, so the employee would need to actively opt out every 4 years to avoid being covered under the plan.

Employers which already have a plan under the existing PPE legislation with at least a 3.5% company contribution and a take-up rate of at least 25% of the whole population will be exempt from implementing a PPK. The minimum contributions under PPE plans are higher than under the PPK rules (3.5% of salaries vs 1.5% under the PPK). However, based on our latest survey, around 27% of companies  have already decided or consider establishing a PPE to avoid falling into the PPK (and this number keeps increasing as employers are finalizing their decision following the updates in the legislation). The main reasons for this seem to be a mistrust of the state involvement in the PPK, the fact that the PPE can be designed to meet the needs of individual employers and employees (e.g. flexibility on the design, choice of available funds), and the compulsory employee contributions in the PPK.

Employers which have decided to implement a PPE plan ahead of the PPK legislation taking effect are still advised to move quickly to ensure that the FSA registration is effective in time for the PPK exemption to apply. There is increasing demand on the various providers and the legal authority (FSA) to authorize the applications, which is causing some delays to a PPE implementation. Adding the fact that companies need to secure at least a 25% take-up rate with their employees, it takes around 4 – 6 months to complete the entire process at best.