A new voluntary retirement plan was introduced 2019 in Poland: PPK – Pracowniczy Plan Kapitałowy (Employee Capital Plan). It is paid by you, your employer and the state. The money will be invested on the stock market and secure bonds. After reaching 60 years, you will begin to pay out.
Why? Retirement and additional money
The goal is financial security after retirement. You will get some money at the age of 60, and then monthly payments for 10 years. It is financed by you, your employer and the state.
It’s possible to withdraw earlier, but then you will get less. But even then, it’s worth it because you will get additional money from you employer.
How much do I pay?
Every month, you (the employee) pay 1,5% of your salary to the PPK retirement plan;
Additional, you can decide to pay more, up to an additional 2%. So altogether, depending on what you choose, you pay between 1,5% and 3,5% of your salary monthly.
The employer pays 2% (can be lower in some cases); additional to that, your employer can decide to pay more, up to an additional 2,5%.
Bonus from the State
The state will give you a bit additional money. 250zł at the beginning of your PPK, and then every year 240zł (assuming you have accumulated a value of at least 6 month minimum wage).
What happens next?
Every month, the payment is collected and invested: on the stockmarket, and obligations. Depending on your age – the older you are, the less money is invested in stocks and more in obligations
When will I get money?
When you are 60 years old. You will get up to 25% at once. The rest will be paid out during the next 10 years. You can decide to split the money among more years. Or you can get more at once, even 100%, when you are 60 – but in this case, you have to pay 19% tax.
How much will I get?
Here is a PPK calculator: https://www.mojeppk.pl/kalkulator
For example: When you start PPK at the age of 25, and your monthly gross income is 5000. No additional payments by you or your employer, just the standard rates.
At the age of 60, you will get paid out at once: 55748 PLN
For the next 10 years, every month you will receive: 1596 PLN
Or, at the age of 60, you can get the whole 222991 PLN. In this case, you will have to pay 19% income tax.
You can decide to pay more, up to an additonal 2%, and check how much you will get then. It’s your decision.
Ask your employer if they make additional PPK payments – they can up to a maximum of 2,5%.
Can I withdraw it earlier?
Yes. But the additional money from the state will be taken back. And from the employer payments, 30% will be deduced. Additional, you will have to pay income tax of 19%.
How to opt out?
By default, every employee is rolled in the PPK if aged 18-55. You can opt out. In order to do so, you need to infrom your employer in written form.