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Employee Capital Plans in Poland – is it worth it? + ECP calculator

Employee Capital Plans (ECP) are a common system of long-term savings. Anyone who is employed and subject to pension insurance can join an ECP. Savings are provided by the employee, the employer and the State.

employee capital plans scheme

Key dates – the ECP Act

The ECP Act must be applied by:

  • from 1 July 2019 – companies employing at least 250 persons as of 31 December 2018;
  • from 1 January 2020 – companies employing at least 50 persons as of 30 June 2019;
  • from 1 July 2020 – companies employing at least 20 persons as of 31 December 2019;
  • from 1 January 2021 – other entities, including public sector entities.

Exception: entities belonging to a single group. They choose when to join an ECP – they can join on the date which is mandatory for the largest company. They can join an ECP on the date which is mandatory for the largest employer in the group.

Benefits of ECP

Benefits of ECP:

  • payments from the Employer are exempt from Social Insurance Institution (ZUS) contributions
  • the implementation of the PSC is included in tax-deductible expenses
  • additional contributions as a possibility of additional benefit for Employees

ECP calculator

Example:

Gross salary:PLN 4,500
Employer’s contribution:2%
Employee’s contribution:2%
ECP costs for the Employer:PLN 5,511.60 (The total cost for the employer associated with participants in the PSC scheme including social security contributions and ECP contributions)
ECP contribution:PLN 90.0

Costs for the Employer:

Salary gross Cots ECP Costs Total costs
4500,0 zł brutto 5421,60 zł 90,0 zł 5511,60 zł

Employee Salary:

Employee Salary ECP Costs Tax on the employer’s ECP payment   Net amount after deduction of PPK  
3201,58 zł 90,0 zł 16,0 zł 3095,58 zł

Resignation from Employee Capital Plans?

An employee can resign from EPC at any time. In order to do this he should submit a declaration, with an information about resignation from the declared contributions to ECP, to an employer. The employee will have to submit the declaration again every 4 years. If he does not, it will be automatically included in the program.

An employee, who will participate in the program after the age of 60, will be able to decide how to use the raised funds.

The employee could then:

  • still accumulate funds in ECP,
  • withdraw 25% of funds at one time and withdraw the remaining funds monthly for 10 years,
  • może wypłacić środki we wskazanej przez siebie wysokości, a pozostałe środki wypłacać w dowolnej liczbie rat. Jednorazowo może wypłacić nawet 100% środków, jednak wypłata jednorazowa środków powyżej 25% i skrócenie wypłat ratalnych  poniżej 10 lat skutkuje koniecznością zapłaty podatku.
  • withdraw funds in the amount indicated by himself, and withdraw other funds in any number of installments. At one time there can be withdrawn up to 100% of funds. However, a one-off payment of funds above 25% and reduction of number of installments to less than 10 years result in the need to pay tax.

Another option is to allocate the funds for:

  • a policy in an insurance company,
  • a savings deposit account.

Download a resignation form (only in Polish!):

ECP managing entities

 List of ECP managing entities:

  • Skarbiec Towarzystwo Funduszy Inwestycyjnych S.A.
  • PKO Towarzystwo Funduszy Inwestycyjnych SA
  • Generali Investments Towarzystwo Funduszy Inwestycyjnych SA
  • Santander Towarzystwo Funduszy Inwestycyjnych S.A.
  • Pocztylion – Arka Powszechne Towarzystwo Emerytalne S.A.
  • BPS Towarzystwo Funduszy Inwestycyjnych S.A.
  • Millennium Towarzystwo Funduszy Inwestycyjnych S.A.
  • ESALIENS Towarzystwo Funduszy Inwestycyjnych SA
  • Towarzystwo Funduszy Inwestycyjnych Allianz Polska S.A.
  • Compensa Towarzystwo Ubezpieczeń na Życie S.A. Vienna Insurance Group
  • PFR Towarzystwo Funduszy Inwestycyjnych S.A.
  • BNP Paribas Towarzystwo Funduszy Inwestycyjnych S.A.
  • Nationale-Nederlanden Powszechne Towarzystwo Emerytalne S.A.
  • Aegon Powszechne Towarzystwo Emerytalne S.A.
  • AXA Towarzystwo Funduszy Inwestycyjnych S.A.
  • Pekao Towarzystwo Funduszy Inwestycyjnych S.A.
  • ESALIENS Towarzystwo Funduszy Inwestycyjnych SA
  • Towarzystwo Funduszy Inwestycyjnych Allianz Polska S.A.
  • Investors Towarzystwo Funduszy Inwestycyjnych S.A.
  • Aviva Investors Poland Towarzystwo Funduszy Inwestycyjnych S.A.

Author: Jolanta Rustecki

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