Employee Capital Plans to enter into force on 1 January 2019


The bill on Employee Capital Plans (PPK) introduces a universal, supplementary pension saving scheme operated within workplaces. Eventually, PPK will be mandatory for entities that employ workers based on the contract of employment, as well as those that use civil law agreements (contracts of mandate, contracts for the provision of services, agency contracts). The only exempt entities will be:

1) Employers that operate Employee Pension Plans (PPE) and pay PPE premiums totaling at least 3.5% of remuneration; 
2) Micro-entrepreneurs, subject to certain conditions;
3) Natural persons not registered as sole traders.

The law is expected to come into force on 1st January 2019. This particular date will apply to entities that employ at least 250 people. In subsequent years, it will be broadened (starting 1st July 2019 to employers employing at least 50 people, starting on 1st January 2010 to those employing at least 20 people, and starting on 1st July 2020 - others, including publicly financed entities).  The introduction of PPK imposes new duties on employers.

In particular, the employer will have to enter into an agreement for the management of the PPK with a financial institution, as well as into individual agreements for PPK management on behalf of each employee, pay mandatory premiums towards the employee’s pension and provide information and administrative service. These obligations, as well as the structure of PPK premiums, will constitute a significant cost for the employer. In addition, failure to comply with the provisions of the law leads to criminal liability. Thus, the PPK will be an administrative, organizational and financial challenge. In particular, the mechanism of “voluntary” saving on PPK that is foreseen by the law is especially doubtful. The new law’s understanding of the word “voluntary” is such that employees will be automatically enrolled, with the right to withdraw at any time.