The Pension Landscape Poland


In 1999, the state pension system in Poland was radically reformed. Within the new regime, benefits are strictly linked to the contributions paid in order to secure the sustainability of pensions. Alongside the pay-as-you-go financed state pension provision, a capital-funded component was introduced, the so-called Open Pension Funds (OFE = named as second pillar). Initially, the component was mandatory but in 2013, another reform, besides increasing the retirement age, strongly changed the position of the OFEs. Since the reform participation is no longer obligatory, the employee has to declare his explicit wish to contribute into an OFE system.

Statutory Pension

Social Security Institution (ZUS) and Open Pension Funds (OFE)
  Provision: The statutory pension provision is obligatory for employees and self employed persons. The system consists of two components: the Social Insurance managed by ZUS and the Open Pension Funds which are managed by private financial institutions.
Social Security Fund managed by ZUS
Open Pension Funds (OFEs)
  Financing: Financed on a pay-as-you-go basis through the mechanism of a notionally defined-contribution accounts. The Open Pension funds are managed by private financial institutions and are fully funded.
Total contribution 19,52 % (2018) of taxable income to the old-age pension insurance (the employer pays 9.76 % and the employee pays 9.76%).

The insured has not registered with an Open Pension Fund:
  • 12,22 to ZUS
  • 7.30 % to the sub-account with ZUS
The insured is an active member of an Open Pension Fund:
  • 12.22 % to ZUS
  • 4,38% to the sub-account with ZUS
The insured is a member of an Open Pension Fund:
  • 2.92% is transferred by ZUS.
Covers old-age and death Covers old-age
  Formula: If you are 10 years before your statutory retirement age, OFE will start transferring your accumulated assets to ZUS on the monthly basis. And ZUS will stop transfering your part of pension contribution to OFE if you chose so.

When you achieve your statutory retirement age all your assets accumulated in OFE will be already registered at your sub-account in ZUS.

To have the statutory old-age pension you have to claim at ZUS. ZUS will pay your statutory old-age pension in one amount on the monthly basis.
Old-age pension = Indexed contributions + Initial capitalaverage life expectancy at retirement age in months

Occupational Pension

Occupational pension schemes were introduced in 1999 but are not very widespread. Only approx. 2% of workforce covered by Employee Pension Programs (PPE).
Non-obligatory by law
The plan must be offered to more than 50% of the employees in the company.
  Tax incentives: Employee contributions are based on after-tax earnings. Benefits are exempted capital gains tax.

Private Pension Savings

Products: Individual Retirement Accounts (IKE) and Individual Pension Security Accounts (IKZE) available as life insurance, mutual investment fund, brokerage account, (special) bank account or voluntary pension fund (only IKZE).

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