Employee Capital Plans Came in Force

In July 2020, Poland finished last step of the retirement system reform. The Polish Prime Minister believes that every employee and the whole country will benefit from the new pension program.

Employee Capital Plans foresee the deduction of payments from employees’ salaries on a monthly basis. In fact, they consist of the three core elements: payments from employees, payments from employers, and state payments. This money will be kept on the individuals’ accounts till employees reach pension age. After reaching the pension age, the account owner will be permitted to withdraw the money without paying the capital gain tax.

The new program is being implemented in parallel with the state pension system. This is a voluntary system and the person may refuse to participate. It is hardly possible to make any forecasts on the number of people willing to participate in the program. Meanwhile, the state will promote it highlighting that the money belongs to the future pensioners only and can be inherited.

However, it is a challenge to convince Polish citizens that the new system will work for their good. The capital plans payments will be deducted from their salaries. Also, the employer’s contributions will affect employees’ income; the salaries will simply become smaller. 

Currently, the Employee Capital Plans program is applied to bigger companies employing more than 50 people and will be extended to medium and small businesses later.


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