PPK for mandatories
November 9, 2022
PPK, or Employee Capital Plans, is a program that allows employees to save for additional retirement. In some cases, an employee is automatically enrolled in PPK. In the event of contracts for which social security contributions are not paid, you cannot join PPK. And how is it with contracts of mandate?
For who is PPK?
PPK allows employees to withdraw their money after the age of 60. Some people are registered automatically, and some have to join the PPK on their own. Employees are automatically enrolled in the program if they are over 18 and under 55 years old, and meet other conditions set out in the Act of October 4, 2018 on employee capital plans (these include length of service or type of contract). On the other hand, employees up to 70 years of age may enroll only upon their request. Anyone can cancel their participation at any time.
Purpose of PPK
PPK aims to increase the financial security of Poles, economic and enterprise development, increase number of workplaces, as well as to multiply retirement savings of employees.
Funds are obtained from three sources:
- from the participant’s salary (2% of gross salary – on the basis of contributions for retirement and pension insurance)
- from the government (1-time “welcome contribution” from the state budget – 250 PLN and an annual surcharge – 240 PLN every year)
- from the employer (1.5% of gross salary – on the basis of contributions for retirement and pension insurance).
PPK and the mandatory
Only workers who meet certain criteria can participate in the Employee Capital Plans. In the case of the mandatory, he/she may participate in the program if he/she meets the definition of an employed person, described in art. 2 clause 1 point 18 d of the PPK Act. It means that mandatory must be subject to retirement and pension insurance under the mandate contract. However, membership in the PPK in the case of a mandate contract is not automatic. Employer should report the employee to the program after the third month of employment (i.e. after 90 days of employment), no later than by the 10th day of the month following the month in which this period expired.
More about PPK
Author: Aleksandra Skalij