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The Sejm passed the act on pan-European individual pension product (PEPP)

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The Act on the pan-European individual pension product (PEPP) was passed by the Sejm. The solution is to provide citizens of the European Union with new opportunities to save for retirement. 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.

235 deputies voted for the act, 138 were against it and 80 abstained. The bill will now go to the Senate.

OPIE – details

The act provides for the creation of a pan-European personal pension product (PEPP). The solution 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. 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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Recommendations of the Financial Stability Committee

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. 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.

Read also: The gap in pensions. Here are the highest and lowest benefits in Poland

Main photo source: Grand Warsaw/Shutterstock



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