Changes to the PPK – additional conditions for the PPK waiver

2018.06.29

At the end of May 2018, a new bill on the Employee Capital Plans (PPK) was published. It is not enough to operate the PPE (Employee Retirement Plan) and to pay the 3.5% premium in order to be able not to create the PPK. For the PPK waiver to apply, at least 50% of the staff will have to enroll in the PPE.

The new regulations contain many changes compared to the previous version. The changes that are the most important for you concern the regulations of the use of the PPK waiver in case an Employee Retirement Plan (PPE) is in place. A new important condition on the use of such a waiver has been introduced. It will not be enough to operate the PPE and to pay the basic premium of no less than 3.5% of the remuneration in order to use the waiver. In addition, at least 50% of those employed will have to join the PPE (employees, outworkers, contractors). In practice, this might discourage companies from starting the PPE, given the significant risk of not reaching the 50% threshold and the consequent need to operate the PPE and the PPK in parallel. Needless to say, the parallel maintenance of two company-level retirement plans is not economically justified.

In addition, the bill includes provisions that unequivocally determine the status of the funds collected in the PPK as private, extend the validity of the withdrawal from the PPK from two years to four years and reduce the sanctions for employers who discourage employees from saving in the PPK. As far as the range of the entities that will be able to offer the PPK is concerned, it is worth noting that in addition to investment funds (TFI), these will include universal pension funds (PTE), employee pension funds and insurers. We recommend ongoing monitoring of the legislative process. The bill foresees the PPK coming into force on 1st  January 2019. It is quite possible, however, that this timeline will be delayed by 6 months.