Handling of Employee Capital Plans (PPK).

Regardless of the size of the organization

• data imports into the IF portal,
• calculation of payroll contributions,
• importing data for RCA reports,

And more, depending on the customer's needs

• resignations from participants' PPK contributions,
• returns,
• redeposit of contributions,
• additional contributions,
• transfer refunds from an employee's existing PPKs,
• reduced contributions.

For the entire organization

After the transitional provisions in effect until May 2021, employers who started in 2021 and later or lost the right to exemption (from the obligation to launch PPKs) shall implement PPKs within the deadlines prescribed by the general provisions.

These provisions are included in Articles 16 and 8(1) of the PPK Law. In a nutshell, new entities are required to conclude an agreement to operate PPK on behalf of an employed person no earlier than 14 days from the date of employment and no later than the 10th day of the month following the month in which the 3-month period of employment has expired, unless the employed person submits a declaration of resignation from joining the program before that period expires. At the same time, it should be borne in mind that the 3-month period includes periods of employment from the previous 12 months with the entity.
On the other hand, the agreement on the management of the PPK should be concluded by the employing entity at least 10 working days before the date on which it is obliged to conclude an agreement on the management of the PPK with respect to the first employed person.

The general provisions (Articles 16 and 8) should also be well analyzed and applied by entities that have previously enjoyed an exemption from PPK implementation under the Law, or have not had to implement (due to lack of title from Social Security contributions).

These entities must control whether the conditions allowing exemption from PPK implementation have changed over the course of their business activities, and, when called upon by the PFR, submit a relevant statement on whether they meet the conditions for exemption from the PPK Law.

The exemption was available to micro-entrepreneurs, entities with implemented PPC or those that did not have to make mandatory Social Security contributions.

Micro-entrepreneurs lose the right to the exemption if:
- lose their status as micro-entrepreneurs (according to the definition of a micro-entrepreneur described in Article 7, paragraph 1, item 1 of the Entrepreneurs Law; special attention should be paid to the fact that average annual employment is determined in terms of full-time equivalents)
- if, despite their status as micro-entrepreneurs, they employ a person who does not opt out of joining the PPK
- one of the employed persons (e.g., from among those who previously submitted a declaration of resignation) submits a declaration to the employer to make payments to PPK, or all of the employed persons, every 4 years (starting April 1, 2023) again fail to submit a declaration of resignation from PPK.

On the other hand, entities where the PPK is in force must check the participation rate in the PPK twice a year (January 1, July 1).

And, check the fulfillment of the other conditions listed in Article 133 of the PPK Law on an ongoing basis, as the employing entity may not use the PPK implementation exemption starting from the date:
- suspension of calculation and payment of basic contributions to PPE for a period exceeding 90 days
- limitation of the amount of basic contributions paid to PPE below 3.5%
- liquidation of PPE
- a delay in the payment of basic contributions to PPE in excess of 90 days, which resulted from the intentional action of the employing entity.

In this situation, the status of the employing entity will be that of a social security payer.

In this situation, the entity signs an agreement to manage the PPK with the Financial Institution, but does not enter into an agreement to operate the PPK on behalf of the employed person.

Joining the Employee Capital Plans program is voluntary. The employee himself decides not only whether he wants to join PPK, but also at what point he wants to do so. He can also resign from participation in PPK at any time.

How to join the Employee Capital Plans program depends on meeting the criteria indicated in the regulations: Persons who are 18 years of age and under 55 years of age and are subject to mandatory pension insurance by virtue of employment with a particular employer - will be enrolled in the PPK program automatically. Persons who are at least 55 and under 70 years of age and are subject to mandatory pension insurance by virtue of employment with the employer in question - may voluntarily enroll in the PPK program only upon their application to the employer. Persons over the age of 70 - may not join the PPK program.

Opting out of the PPK program is accomplished by the employee submitting a written declaration of opting out of making contributions to PPK to his employer. A model declaration can be found in the Ordinance of the Minister of Finance of June 12, 2019 on declarations of resignation from making contributions to employee capital plans. However, it should be remembered that the declaration of resignation from making contributions to PPK should be submitted by the employee to the employer every 4 years. This is because starting from April 1, 2023, any employee who previously resigned from participation in the PPK program will be automatically reassigned to it.

For each employee saving in PPK, a financial institution selected by his employer opens a private named account where his savings are accumulated. The institution provides each PPK participant with online access to the system, where participants can check the balance of funds in their account and manage them at any time.
Login information is sent at the start of saving. It should be remembered that granting access to the system at each financial institution looks different.

The employee will set aside 2% of his salary from his own money. He will also have the option to declare an additional contribution of up to 2% of his salary as well. Thus, he can declare that a maximum of 4% (basic and voluntary contribution) will be deducted from his salary. The PPK participant's declaration of financing the additional contribution will be effective from the month following the month in which it was made.
The employee will be able to reduce the basic contribution (2%) if he earns a low salary from various sources, i.e. less than 1.2 times the minimum salary. In that case, the minimum base payment cannot be lower than 0.5%.

An employee will be able to withdraw the savings accumulated in his or her account when he or she turns 60. The most favorable form of withdrawal (tax-free) will then be a one-time payment of 25% of the accumulated savings, while the remaining 75% of the savings will be paid in monthly installments spread over at least 10 years.
The employee will also have the option of withdrawing all accumulated funds at once or in fewer installments. However, such a withdrawal will incur a capital funds tax.
The regulations also provide other options for withdrawal of accumulated savings, in case of:
Serious illness of a PPK participant, his or her spouse or child, in which case there is the possibility of withdrawing up to 25% of the saved funds without the obligation of repayment.
Financing of an own contribution in connection with the construction or reconstruction of a residential building or the purchase of an apartment or land for persons under 45 years of age - then there is the possibility of withdrawal of up to 100% of the saved funds with the obligation of repayment. The term of repayment must begin no later than 5 years after the disbursement of funds and may not last longer than 15 years

Both retirees and pensioners who receive a salary within the meaning of the PPK regulations are also entitled to participate in the program. However, this applies to those under the age of 70.
Those over 70 years of age - cannot join the PPK program.