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New ways to save for retirement. It’s signed by the president

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President Andrzej Duda signed the act on the European individual pension product, the president’s office announced on Wednesday. The purpose of the Act is to provide citizens of the European Union with new opportunities to save for retirement.

Office of the President of the Republic of Poland announced in a statement Wednesday that the president Andrzej Duda signed the act on the European individual pension product. The Act provides for the creation of PEPP, which is to provide citizens of the European Union with new opportunities to save on retirement. PEPPs will be able to invest cross-border as well as transfer PEPPs when changing residence from one EU Member State to another.

A new way to save for retirement

Similar tax arrangements will be applied to PEPPs as in IKE, i.e. exemption from taxation of income generated when saving on a PEPP sub-account. This will also apply to income generated at the time of withdrawing funds from such a sub-account, after the saving goal has been achieved.

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The annual limit of payments to PEPP will be the amount corresponding to three times the average projected monthly salary in the national economy for a given year. For example, in 2023, the amount of payments to PEPP in Poland was set at PLN 20,805. PEPP benefits will also be exempt from flat-rate income tax. The limit of costs and fees related to the operation of PEPPs will be 1%. accumulated capital.

Changes in SKOK

Other provisions of this act introduced the recommendations of the Financial Stability Committee regarding the improvement and strengthening of the capital base of cooperative savings and credit unions (SKOK). It is about meeting the requirements for, among others, minimum level of own funds.

The act will enter into force 14 days after its announcement, except for the indicated regulations coming into force on a different date.

Main photo source: Shutterstock



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