Employee Capital Plans (PPK) in Poland

In Polish Employment Law – Employee Capital Plans is a long-term saving program for employees. This is an employer-run program that allows employees to accumulate savings with the support of the employer and the state. This scheme is voluntary for employees but mandatory for employers, except for the cases mentioned below.

Is the Employer obliged to run PPK?

Not every employer in Poland is obliged to run PPK, but this applies to the vast majority. First of all, it depends on the size of the entrepreneur. Employers with the status of a micro-entrepreneur are exempt from the obligation to maintain PPK – provided, however, that all employees employed by such an employer submit a declaration of resignation from joining the PPK. So if there is at least one employee who wants to use the PPK – even a micro-entrepreneur will have to run a PPK. Entrepreneurs running Employee Pension Schemes, which have been joined by at least 25% of employees, are also exempt from running PPK, provided that they calculate and pay basic contributions to PPE in the amount of at least 3.5% of remuneration. Apart from these two cases, every employer is obliged to maintain PPK.

Employer’s obligations related to PPK

Running PPK entails additional obligations for the employer. The employer should:

• choose a financial institution where PPK accounts for employees will be created and conclude a PPK maintenance contract with this institution;
• conclude a PPK contract for each employee, not later than by the 10th day of the month in which the period of 3 months of the beginning of employment expired;
• gather declarations of resignation from employees who do not want to join PPK;
• inform employees about the so-called auto-subscription to PPK and the need to re-submit a declaration of resignation from the PPK within the indicated period;
• make timely payments to the PPK.

How to choose the financial institution running the PPK?

There are already about 18 investment funds on the Polish market that offer management of Employee Capital Plans. In the face of such a large selection, one should ask oneself: what criteria should be used when choosing the institution running the PPK? We usually recommend our clients to pay attention to factors such as:

• experience of the institution in running investment funds;
• the amount of fund management fees,
• additional benefits for employees offered in addition to PPK management,
• additional services such as: an app for employees and employers, a dedicated hotline, training for employees or HR departments, online meetings etc.,
• number of facilities,
• value of net assets invested in a given institution,
• the number of entrepreneurs who have entrusted the management of the PPK to a given institution.

PPK – which provider is the best?

In addition to the offers published on the websites of investment funds, it is also worth checking the current rankings and comparisons of suppliers.

PPK – Legal Advisory

Understanding the way PPK functions and choosing the right institution often causes many problems for employers, especially in the case of foreign employers who are just starting their operations on the Polish labor market. Lawyers from our law firm’s labor law team support employers in the process of concluding contracts with PPK suppliers and in fulfilling obligations related to PPK. At the client’s request, we also prepare comparisons of offers of PPK suppliers.