What is the Employee Capital Plan (PPK)?
- The PPK is a long-term saving scheme for employees created and co-financed by employers and the State Treasury.
- The main objective of the PPK is to systematically save funds that will provide to their participants an additional financial buffer after the age of 60.
- Participation in and contributing funds to the PPK is voluntary for employees – all employees who have attained the age of 18 years but have not attained the age of 55 years are automatically enrolled in the PPK by their employers, but they are able to opt out of paying contributions to the PPK at any time. Employees who have attained the age of 55 years but have not attained the age of 70 years may enrol in the PPK if they file a request with their employer. After the age of 70, the enrolment in the PPK is not possible.
- The funds in the PPK are private property – employee can freely dispose of them before and after the age of 60. Employee is also able to identify those who will receive the funds accumulated in the PPK in the event of his death.
- Contributions to the PPK are invested in the defined date sub-funds where the level of investment risk will be reduced as employee get closer to the age of 60, i.e. the time of withdrawal of the funds from the PPK. Employee is able to withdraw the savings in the PPK in full, but it is most advantageous to withdraw 25% on a one-off basis and 75% in at least 120 instalments and over a minimum of 10 years. In such case, employee pays no tax on capital gains.
- Employee has the opportunity to make early use of his savings if he, his spouse or his child get(s) seriously ill – up to 25% of the funds without the obligation to return them; if employee want to pay his own contribution when taking out a loan for an apartment or construction of a house – up to 100% of the funds with the obligation to return them within 15 years (for people who have not attained the age of 45 years).
* The following employers do not have to join the Employee Capital Plan:
- employers who maintain Employee Pension Programmes, calculate and pay the basic contribution for their employees (for at least 25% of employees) in the amount of at least 3.5% of remuneration within the time limits specified in the Act on Employee Capital Plans,
- employers who are natural persons conducting business activity and employ natural persons to the extent not related to their business activity and the business activity of these persons,
- employers who are micro-entrepreneurs referred to in Article 7(1)(1) of the Act of 6 March 2018 – Entrepreneurs’ Law (Journal of Laws, item 646, as amended), if all persons employed submit a declaration on the resignation from contributions to the employing entity.
How does it work?
* The basic contribution financed by the Employee may be lower than 2% (but not less than 0.5%) of the salary if the Employee’s income from all sources in a given month is not higher than the equivalent of 1.2 of the minimum wage in Poland.
Obligations of employer and employee
Employer
- Select a financial institution to manage PPK in agreement with the trade union or representation of employees
- Conclude PPK management agreement and PPK maintenance agreement with the institution of choice
- Inform all employees about the selected institution managing PPK
- Make contributions to employees’ PPK accounts
- Possibility to make additional contributions to employees’ accounts in PPK (up to2.5% of the employee’s gross salary)
Employee
- Employee’s individual PPK account is automatically established after concluding PPK agreement by the employer with the financial institution of choice on behalf of the employee.
- The employee may resign from making payments to PPK
- Possibility to make additional payments to one’s own account in PPK (up to 2% of the employee’s gross salary)
- Possibility to withdraw 25% of the amount paid as a one-off once the employee turns 60, with the remaining part paid in monthly instalments (at least 120 instalments)
What is the contribution to PPK?
Contributions to PPK (by both employer and employee) are calculated on the basis of the salary* of the employee. The amount of the basic and additional contribution constitutes the following:
Contributions to the Employee Capital Plan are calculated on the remuneration which, within the meaning of the Act on Employee Capital Plans, is the basis for the calculation of contributions for the pension and disability insurance of the participant of the Employee Capital Plan referred to in the Act of 13 October 1998 on the social insurance system, without applying the limitation referred to in Article 19(1) of that Act and excluding the basis for the calculation of contributions for the pension and disability insurance of persons on child care leave and receiving maternity allowance or allowance equal to the maternity allowance.
| Contribution | Employer | Employee |
|---|---|---|
| Basic (mandatory) contribution | 1,5% | 2%* |
| Additional (voluntary) contribution | Up to 2,5% | Up to 2% |
| Additionally contributions from the State Treasury |
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| Fiscal incentives |
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* basic contribution financed by the employee may amount to less than 2% of the remuneration, but not less than 0.5% of the remuneration, if the employee’s remuneration from different sources in a given month does not exceed the amount equal to 1.2x of the minimum remuneration.
What are the benefits of running PPKs?
Employer
- PPK as an additional component of an attractive benefit package offered by the employer (e.g. making additional contributions for employees after a certain time of service on top of the basic (obligatory) contribution of 1.5%).
- Employer’s costs associated with the financing of contributions to PPK can be treated as income deductible expenses.
- Contributions financed by the employer are excluded from the base salary, which is used to calculate social security and disability insurance premiums.
Employee
- Additional savings after the age of 60 (an Employee joining the PPK at the age of 20 with a gross monthly salary of PLN 4,000 may save ca PLN 240,000*).
- Capital investment in accordance with a strategy aligned with the employee’s age which will be adjusted with time.
- The savings in PPK are treated as entirely private assets, unlike the pension premiums paid to ZUS and OFE.
- No tax** imposed on money withdrawn by the employee from PPK past the age of 60.
- Acquisition of PPK assets through succession is not subject to donation or inheritance tax.
* After 40 years of saving assuming an adequate rate of return (the fund, however, does not guarantee achievement of the investment goal) - calculations made using the PPK Calculator available at https://www.mojeppk.pl/kalkulator.html It will open in a new window. Calculation assumptions: age of an employee enrolled in the PPK – 20 years, PLN 4,000 gross remuneration, basic (mandatory) contribution of the employee to the PPK: 2% of gross remuneration, basic (mandatory) contribution of the employer to the PPK: 1.5% of gross remuneration, projected annual rate of return in the withdrawal period: 2.75%, projected annual increase in remuneration: 2.8%, projected annual average rate of return in the investment period: 3.5%, no additional contributions, saving up to the age of 60, management costs – 0.50% (include no more than 0.10% success fee).
** A flat-rate 19% capital gains tax (pursuant to Art. 30a sec. 1 item 11b of the PIT Act) will not be charged on withdrawals made after the participant turns 60 in accordance with the following terms: 25% of total amount of money will be withdrawn at one time and the remaining 75% (or 100% if a decision is made to withdraw the whole amount of money in instalments) over a period of 10 years, in at least 120 monthly instalments. If the withdrawal terms are changed (fewer instalments or withdrawal of all money at one time under the circumstances provided for in the PPK Act), personal income tax will be charged on the disbursed funds and the value of the taxable income will be determined in accordance with Art. 30a sec. 13 of the PIT Act as an amount of proceeds from the repurchase of participation units or redemption of settlement units, less the cost incurred in connection with the purchase of these participation units, or cost of acquisition of these redeemed settlement units.
How and by whom the funds in the PPK are invested?
Throughout the period of participation in the PPK, employee saves in one sub-fund matching the risk level to his age, i.e. in the so-called defined date fund.
Each PPK participant is automatically assigned to the specific defined date sub-fund corresponding to their age. In line with the provisions of the PPK Act, the investment policy of such sub-funds reduces the investment risk as you get closer to the age of 60. Knowing exactly the investment perspective (date of attainment of the age of 60 years), it is possible to initially invest more of the funds (assets) into shares and then (as you get closer to the age of 60) to gradually invest more and more funds in debt instruments characterised by lower investment risk.
| Allocation of the defined date sub-funds: | Share part (including shares) | Debt part (including bonds) |
|---|---|---|
| from the creation of the sub-fund to 20 years before the defined date | 60 – 80% | 20 – 40% |
| 20 years before the defined date | 40 – 70% | 30 – 60% |
| 10 years before the defined date | 25 – 50% | 50 – 75% |
| 5 years before the defined date | 10 – 30% | 70 – 90% |
| starting from the defined date | max. 15% | min. 85% |
Investing activity involves risk. The sub-funds Santander PPK SFIO do not guarantee that the stated investment objective will be achieved or that a specific return on investment will be achieved. The participant must take into account the possibility of losing at least part of the invested funds. When investing in mutual funds, the participant acquires participation units of such funds, and not the underlying assets that the fund itself invests in.
The Santander PPK SFIO sub-funds are characterized mainly with the volatility of market interest rates, credit risk, liquidity risk and with the volatility of stock prices. Detailed description of the subfund’s risks can be found in the prospectus and, in summary form, in Key Investor Information (KIID).
Before making any investment decision please read the fund prospectus, which contains, inter alia, the full list of risks.
Sub-funds of Santander PPK SFIO
9 sub-funds of Santander PPK SFIO investment fund have been made available to PPK participants:
PPK in Santander TFI
- 9 defined date sub-funds for PPK participants under Santander PPK SFIO.
- No more than 0.4% permanent management fee - details in the table below.
- No more than 0.1% success fee (0% for Santander PPK 2065 until December 31, 2023).
- 0% conversion fee (for changing the investment allocation) regardless of the number of changes.
- No additional charges from employers or employees for access to dedicated PPK online services and the helpline.
More information about fees in Santander PPK SFIO It will open in a new window
Our advantages
- Over 25 years in the investment fund market.
- One of the largest and most experienced management companies in the Polish market.
- Assets under management with a value is close to PLN 21 billion.*
- Over 220 thousand loyal customers.
- Years of experience in the establishment and management of Employee Pension Schemes (since 2001) and Individual Pension Accounts (since 2004).
- The value of assets accumulated in Individual Pension Accounts maintained by Santander TFI is over PLN 430 million.*
*as of February 29, 2024
Awards and recognitions
This document is presented for marketing purposes and does not constitute an agreement or an information document required by law.
It should not be relied upon as the sole basis for making investment decisions.
The contents of this subpage have been prepared on the basis of the Act of 4 October 2018 on Employee Capital Plans (PPK) and are up-to-date as at the date of their publication on the website. These contents do not constitute legal, financial or tax advice, nor do they replace the applicable provisions of law and should be each time interpreted and used in compliance with applicable legal regulations.
The net asset value of the Santander PPK SFIO sub-funds can be highly volatile due to the composition of the investment portfolio. Some sub-funds may invest more than 35% of their assets in securities issued, guaranteed or underwritten by the State Treasury or the National Bank of Poland.
The rewards of investing in shares are also accompanied by risks. A description of the risk factors, financial data and information about fees and charges can be found in the prospectuses, key information documents (KIDs) and schedules of fees and charges available in Polish at Santander.pl/TFI/documents. For a summary of investors' rights, see the prospectus (Chapter III, sec. 4).
The Funds do not guarantee the achievement of a stated investment objective or a specific investment performance and future returns are subject to taxation, which depends on the personal situation of each investor and which may change over time. Before making an investment decision, the participant should consider the fees associated with the sub-fund and take into account the possible taxation of the investment return. The participant must also take into account the possibility of losing at least part of the invested funds.
When investing in mutual funds, the participant purchases the units of those funds and not the underlying assets that the fund itself invests in.