The pension system is an area where there is always room for improvement to make benefits as high as possible. However, it is not difficult to create innovation without greater justification. The government plans to give everyone an opportunity to participate in a voluntary programme to which the employer and to a lesser extent the Treasury would pay. The project includes new savings prospects and the construction of a financial penalty for divorce.
Employee Capital Plans (PPKs) are intended to provide an opportunity for a higher pension through regular payments. The new is that they would be financed not only by an employed person. The employer would be paid (basic contribution of 1.5% pay and voluntary at 2.5%) and the Treasury (250 PLN start and 240 PLN every year).
Divorce Complications
Divorce is linked to the division of common assets. The whole procedure can be tedious and emotional for both parties. The PKK bill describes in detail the mechanism for allocating funds collected under this programme in the event of a dissolution of the marriage.
If only one of the spouses participated in PKK, this whole sum is shared between the two. However, the Treasury collects a commission. second the spouses will then receive a fraction less the statutory values. The funds collected under the PKK come from the participant, employer and State Treasury. Amounts from two the last sources will be reduced accordingly by 30% half of contributions and 50%
It is difficult to understand the point of deducting half the amount received from the State Treasury due to divorce. This could be described in the opinion: the state gave to take it later.
It also appears that there is no justification for receiving 30% catches of contributions financed by the employer.
Impression of duplicating existing solutions or creating illusions
Voluntary contributions to increase future benefits are not news. It's called a construction. third the pension pillar. However, interest in this form of saving is very small.
The Employee Capital Plans are de facto a copy of this scheme with small bonuses from the State and the employer. Perhaps these small differences will encourage someone, but it is difficult to expect a revolution. Nor can you expect that 240 PLN the annual payment by the Treasury will significantly affect the amount of the future pension.
The employer's contribution is not a free gift but a cost that will be taken into account when establishing a remuneration plan. one of basic economic rights states that there are no free meals, because for everything someone has to pay.
The amount of pensions in Poland is widely regarded as low and does not offer much opportunities. The withdrawal from the increase in retirement age may have brought joy to many, but each of them had to know that this would not increase the chances of better benefits. It is difficult to resist the impression that the draft occupational capital plans are an attempt to create an illusion.
Source: https://www.forbes.pl/finanse/nowa-forma-oszczednosci-emerytalnych-ppk/mjb47tl
Author
Andrzej Dmowski
Managing Partner Russell Bedford, Doctor of Legal Sciences, Lawyer, Tax Advisor, Restructuring Advisor, Certified Public Accountant – Expert Auditor in Ireland, Certified Fraud Examiner - Expert in Crime Detection and Abuse, Certified Internal Controls Auditor - International Internal Auditor.
Graduate of the University of Cambridge - British Centre for English and European Legal Studies - Faculty of Law and Administration, Graduate and Fellow of the Faculty of Law and Administration of the University of Warsaw.
Specializes in settlement of transactions between related entities - transfer pricing, legal and tax aspects of M&A and issues concerning derivatives of financial instruments.