On 21 November 2022, an amendment to the ECS Act comes into effect. From the employers' perspective, the most significant changes are:

• Regulating the procedure for making adjustments to unduly made contributions to the ECS;

Until now, the ECS Act lacked a regulation on the procedure for withdrawing from the ECS contributions that have been paid and then proved to be undue. Such a situation may arise, among other things, if the employer enrols in the ECS a person who has effectively made a declaration of resignation from saving in the ECS, or if the employer has mistakenly made contributions in excess of those due.

Undue contributions made are subject to refund to the person or entity that funded them, i.e. the employee, the employer or the Labour Fund, respectively (undue welcome contributions or annual additional contributions). Such a refund is made without the employee having to submit an instruction to repurchase or redeem participation units. 

When undue contributions are subject to refund to the employee, and the financial institution does not have information about the employee's bank account number, the refund is made to the employer's account. The employer is obliged to immediately, no later than within 5 business days, transfer this amount to the employee.

• Regulating the method for obtaining information by the employer that allows it to stop making contributions to the ECS;

If an employee begins withdrawing funds from the ECS account after the age of 60, the employer no longer makes ECS contributions for that person. The financial institution informs the employer about the start of withdrawals by the employee.

Find more in the PRO HR November 2022.