On February 15, 2018 the long awaited draft of the Act on Employee Capital Plans (Polish acronym: PPK) was published. According to the draft, on January 1, 2019 the largest employers may be faced with an obligation to set up a PPK. The planned legislation significantly increases public burdens and imposes new obligations on employers relating to the need to create PPK.

Not only for employees

According to the draft, PPKs will be set up for a wide variety of persons ‒ not just those working on employment contracts ‒ including individuals working on agency agreements, mandate contracts or other service agreements, supervisory board members who are remunerated for their duties, and people engaged in cottage industries / home work or agricultural co-operatives.

All entities hiring people and paying social insurance contributions will be obliged to set up a PPK. There are only three exceptions:

  • employers who run Employee Pension Schemes (PPE) and pay PPE contributions of at least 3.5% of pay;
  • micro-businesses (which in at least one of the two last years have fewer than 10 employees and net turnover or sum of balance sheet assets at the end of one of these years of less than EUR 2 million), if within 60 days the first person being hired all their employees submit a declaration of non-payment of contributions to PPK,
  • individuals not conducting business activity.

When do the new obligations take effect?

The date you need to take action relating to PPK depends on how many employees you have.

Number of persons

The date PPK related duties start


1 January 2019

50 - 249

1 July 2019

20 - 49

1 January 2020

< 19

1 July 2020

A PPK is set up to systematically accumulate savings that will be paid to participants after they reach 60 years years of age. The employer must (i) enter into agreements with a financial institution to set up and manage the PPK and (ii) pay contributions. Savings in the PPK are to be fully private and inheritable.

At age 60 a participant will be able to withdraw 25% of savings from the PPK in a lump sum. The rest will be paid out in monthly installments.

A PPK participant under 45 years of age will be able to withdraw all accumulated savings to cover the costs of taking out a home loan. This money will have to be returned to the PPK within 15 years. A participant may withdraw 25% of his savings in the case of serious illness in the immediate family (self, spouse, child).

The employer and participant must pay statutory contributions. They may both make additional voluntary contributions. The figures are set out in the table below:

Basic contribution as % of pay

Additional voluntary contribution as % of pay

Statutory contribution

Maximum contribution

Paid by employer

1.5 %

up to 2.5 %



Paid by participant

2 %

up to 2%

The participant will receive from the state budget an annual payment of PLN 240 and a one-time starter lump sum of PLN 250.

Participation in the PPK is voluntary, on an opt-out basis. Participants will be automatically registered for PPKs and they may file a non-participation declaration to the employer (regularly renewed). By the end of February every two years, the employer will inform non-participating employees about registering them in the program and starting to pay contributions. Employees not wishing to participate will have to once again file a non-participation declaration to the employer. Employees who previously declared their non-participation, may apply to register in a PPK at any time.

A participant leaving a PPK will receive 70% of his savings, less personal income tax. The other 30% will be transferred to the individual account of the participant at the Social Security Office. Criminal penalties There are penalties for failure to fulfill the obligations stated in the Act. Fines ranging from PLN 1000 to 30 000 apply for failure to: enter into agreements to set up and manage a PPK, pay contributions, provide documentation or report required data. If such actions are malicious and persistent, they may be penalized by a fine, restriction of freedom or up to 2 years imprisonment. Inducing or forcing a person not to participate is punishable by a fine, restriction of freedom or up to 2 years imprisonment.

Assessment of the regulation

The PPK is intended to be a common and universal program. According to the estimates of the Ministry of Development, PPKs should cover 75% of all employees. The draft regulations would impose a high burden on employers and increase the contribution for employers and employees by a total of 3.5% of pay. The draft is currently in the legislative process and may be subject to change.