3/4 of the OPF will become private property of Poles – Polish Radio

To facilitate the understanding of what changes are proposed in the new model recall, as currently constructed pension system in Poland.

The three pillars of pension

the first pillar of the current pension system is the Social Insurance Institution. There are premiums paid, and paid pensions.

– Unfortunately, given the demographics, these pensions will be low, and will amount to approx. 30-35 percent. last salary. The second pillar is also a public mandatory capital. In Poland, it was open pension funds. But this pillar de facto in 2014 ceased to exist, because it transferred a significant part of the funds to ZUS and introduced the so-called. slider, which makes these measures more flow to Social Security than influence to pension funds – explains the guest Ones Paul Boris, president of the Polish Development Fund.

The third element of this system is a private, voluntary third pillar, where we have personally individual retirement account, or also be a member of the Employee pension schemes.

Those who are just entering the labor market

Let’s start people who take their first job, enter the labor market and never have to deal with pension funds. Their contributions are discharged only to Social Security.

– The person entering the labor market, which did not choose OFE, which uses the system compulsory, and from her salary is discharged contribution amounting to 19.52 percent. And in the future retirement of the employee probably will be approx. 1/3 of the wage. On top of that it was more evidently there is no money in the system. I have two options: you can raise pension contributions, de facto taxes, or start yourself put off retirement – explains the guest radio Ones.

The plan presented by Deputy Matthew Morawiecki boils down to the fact that the OPF will be transformed into individual Pension accounts. I will be there within individual pension schemes and additional savings will Employee Equity Plans, that the employer is a program where employees will be able to declare such. 2 percent. his salary, another 2 percent. will come from the employer and will also fiscal incentives.

– In this way, employees will be able to put off retirement, which potentially will be able then to increase pensions by more than half – adds Pawel Borys.

So the person entering the labor market, which did not choose OFE – their retirement will receive from the Social Insurance Institution and the third pillar – that is already operating in individual retirement Accounts, individual Accounts Old Age Security and the new Employee Plans Capital.

If you do not have to choose OFE

In a similar situation are the people oldest, who also did not choose OFE, because they had no such obligation, and their contribution is discharged only Social security.

– But the older people are in a better position than those younger. Because the people who before 2009 odprowadzały contributions to the ZUS so. start-up capital. And their pensions will be at approx. 56 percent. the average salary – says the president of the Polish Development Fund.

Those who were in the ZUS and OFE

And the third largest group, the people who used to transmit ZUS measures, but also to pension funds, some of the abandoned or continue to transmit to them. What will come of retirement?

– As with all Americans – certainly with ZUS. And sadly, it will be dropped. While the funds accumulated in open pension funds, 75 percent. They would be transferred to Individual Retirement Accounts, and would be the private property of the people as a kind of initial capital located on the IRA. And these people will be able to decide whether they want to have the same, within the IRA to declare an additional contribution – emphasizes Paul Boris.

These 75 percent. So funds will go to the third pillar, and become our private property.

– Yes, and I think it is very fair proposal in relation to the 16.5 million participants in the Open Pension Funds, once advertised as means these participants. Indeed, according to this new proposal, these measures actually become their property, within IKE. They will be able to decide how they are invested, which institution manages. Around 25 per cent. these funds will be paid once at retirement age, the remaining part should be allocated to the redemption of the pension – explains the guest radio Ones.

Key: Employee Plans Capital

the proposal lies in the fact that all employers automatically created employee Equity plans for their employees. The employee would have three months to decide whether to participate or give up, because it is a voluntary system.

– If it is, it can take advantage of very attractive incentives from the state, because contributions to it would be exempted from ZUS, and it would be funding from the Labour Fund – notes guest Ones. And what about people who are self-employed, lead single company? For these people, mainly it intended Individual Account Pension Insurance, but it seems reasonable that they be included in the PPK, and it is currently being analyzed.

Also in the case of service contracts, you can imagine including them PPK whereas in the case of contracts for the self-employed is more difficult. – And here rather the product as part of saving for retirement are also IKZE – he added.

However, 43 per cent. Poles earns no more than 2500 zł, and many experts emphasize that not much they can save further for retirement?

– This is why the priority is the PPK, because here to retire is made up of one hand employee, and the second employer and the state. And in this way the loads are much lower, and more people can afford to part of the remuneration to spend on their retirement provision – says visitor Ones Paul Boris, president of the Polish Development Fund.

Robert Lidke, mb