Changes to Employee Pension Programs

President Andrzej Duda signed an amendment to the Act on Employee Pension Programmes (PPE), Individual Retirement Accounts (IKE), and Individual Retirement Security Accounts (IKZE) on 25 April this year, aimed at improving the functioning of employee pension programmes. The package of changes includes facilitation measures for employers as well as solutions encouraging the establishment of new PPEs. As a rule, the new provisions will come into force on 1 July 2022. They include, among other things, amendments to certain participation conditions in PPEs and the removal of the so-called optional ban restricting additional contributions to the programme.

Key changes introduced by the amendment (according to information from prezydent.gov.pl)

Facilitations for employers in running PPEs are introduced by transferring administrative duties related to PPEs from employers to financial institutions managing PPEs, which have the necessary technical infrastructure and staff. This includes transferring the obligation to prepare the annual report on programme implementation, submitted each year to the supervisory authority, and the obligation to notify the supervisory authority of changes to the manager’s data;

The procedure for employers to submit agreements with employee representatives on suspending or reducing basic contributions to PPEs to the supervisory authority has been simplified. Instead of registering such agreements by administrative decision, employers will simply notify the authority of the agreement and submit a copy;

The optional ban on making additional contributions has been abolished, introducing full possibility to make additional contributions. Currently, additional contributions are possible unless the company agreement prohibits them;

It is now possible to make additional contributions from sources other than salary for periods when the participant did not receive salary from the employer. Additional contributions from non-salary sources will be paid by the participant into an additional account indicated by the employer, who will then transfer the contribution to the participant’s PPE account at an agreed time;

The supervisory powers of the Polish Financial Supervision Authority (KNF) have been further specified. Following the amendment, the authority may refuse registration of programme amendments or removal of the programme from the register due to, among other reasons, non-compliance with PPE legislation or failure to remedy irregularities within the deadline set by the authority;

A new solution called “transfer of funds” has been introduced. According to the Act, “transfer of funds” means transferring assets accumulated under the programme by the previous manager to a new manager in connection with a change of programme form or manager. The provisions regulate:

    a) transfer of funds in case of a change of programme form or manager,

    b) the deadline within which the transfer should take place;

Provisions governing suspension and reduction of the basic contribution have been modified. The changes include:

    a) setting a maximum unilateral reduction period by the employer (within a 12-month consecutive calendar period, the total unilateral reduction cannot exceed 6 months);

    b) explicitly stating that after suspension or temporary reduction of the basic contribution, the employer is not obliged to pay the contribution amount not paid due to suspension or reduction;

The Act’s provisions have been aligned with the current regulations of the Act of 18 November 2020 on Electronic Service (Journal of Laws, item 2320, as amended), regarding the handling of matters and preparation of documents using electronic systems, including updated terminology distinguishing “paper” and “electronic” forms.

• Facilitations regarding temporary suspension and reduction of the basic contribution for employers running PPEs.
• Introduction of a maximum unilateral reduction period of the basic contribution by the employer (within 12 consecutive calendar months, total reduction period cannot exceed 6 months). After suspension or reduction, the employer will not have to pay contributions that were not made due to the suspension or reduction.
• Reduction of the notice period from 12 to 3 months in case of unilateral employer decision to liquidate PPE.
• New provisions concerning individual retirement accounts (IKE) and individual retirement security accounts (IKZE), including allowing contracts to be concluded electronically.

Changes to the Acts on Individual Retirement Accounts and Individual Retirement Security Accounts will come into force 14 days after publication. Provisions concerning additional contributions will come into force at the start of 2023. The remaining provisions will apply from 1 July 2022.