The Polish Development Fund admits that several dozen thousand Poles regularly withdraw money from PPK. They do this every month or every few months, and they make money from it. The program assumes that Poles can save thanks to it until the age of 60, but at the same time it allows for earlier withdrawal of funds.
Poles are testing whether “money can be withdrawn profitably”
Thanks to early withdrawals from PPK, participants recover all their contributions and additional employer contributions, it says “Gazeta Wyborcza”. 70 percent of them go straight to our bank account, and 30 percent. to the ZUS account. These withdrawals can be made monthly. It turns out that program participants do this more and more often. As follows from data from the Polish Financial Supervision Authority (KNF)the second quarter of 2024 was record-breaking in terms of payouts. Then 187 thousand Poles paid as much as PLN 498 million from PPK. At the same time, PLN 139 million was paid in 2022, and PLN 400 million in 2023. In the first half of 2024 alone, participants withdrew nearly PLN 1 billion from the program. According to Dr. Łukasz Wacławik from the faculty of management at the AGH University of Science and Technology in Krakow, “many compatriots simply do not believe that we will get back what we save today in ZUS or OFE in old age.” – It is true that they have joined the program, but they want to test it from time to time to check whether the money can actually be withdrawn profitably – he says.
PPK participants treat the program as a short-term bank deposit
How does it work? “GW” gives the example of Mr. Andrzej and Ms. Anna. The first of these people earns PLN 8,000. PLN gross and regularly withdraws money from PPK every year. The amount that goes to PPK is 2%. employee's salary and 1.5 percent employers. In this case, Mr. Andrzej's contribution is PLN 160 and when he decided to withdraw the money saved this year, he received: PLN 1,920 from his own contributions and PLN 1,008 from payments from the employer. A total of PLN 2,928 in cash refund. An additional PLN 432 was transferred to his ZUS account. Therefore, his profit was 52.5%. in relation to its own contributions, i.e. it paid out 152.5 percent. what he paid. Mrs. Anna's earnings are PLN 10,000. PLN gross and she also withdraws money regularly. Last month, she decided to withdraw funds from last year. Her own contributions amounted to PLN 2,400 and from the employer – PLN 1,260. PLN 540 was credited to her ZUS account. The downside of these operations is that due to earlier withdrawals before the age of 60, both people will have to say goodbye to subsidies from the state budget and will pay tax on any capital gains. What is the situation of an employee who does not pay funds? “The total rate of return on investment in PPK for an employee is up to 126 percent to 166 percent. An employee earning PLN 6,000 gross who has been saving in the program since 2019 until June 2024 has 158 percent more in his account than he paid it himself. The total balance of funds in such an employee's account is PLN 16,730, of which only PLN 6,480 comes from his payments” – enumerates on its website the Polish Development Fund.
Employee Capital Plans. That's how it works
Employee Capital Plans (PPK) is a long-term savings system for employees. It was introduced in 2019. Initially in large enterprises, and for the last three years it has also been operating in companies employing less than 20 people. As we mentioned earlier, the employee and the employer make mandatory contributions to the system in the amount of 2%. and 1.5 percent, which may also include additional payments – up to 2 percent. in the case of an employee and up to 2.5 percent in the case of an employer. These payments are calculated as a percentage of the employee's salary. They also include payments from the state, which do not depend on the amount of income. “The saver will receive a one-off welcome payment of PLN 250 from the state for at least three months. Then, every year, after meeting certain conditions, the saver will top up the employee's account with the amount of PLN 240,” we read on the website Mojeppk.pl. The PPK program covers “adult employees working under contracts from whom compulsory pension and disability contributions are paid.” Many employees are automatically connected to PPK and if they do not want to participate in the program, they must submit a special declaration to the employer. However, the situation is different for people who are over 55 years old but are still before their 70th birthday. In such a case, the PPK management agreement is concluded only at their request.