Pracownicze Plany Kapitałowe (PPK) are Poland’s key long-term savings program designed to build additional financial security after age 60.
What are PPK and Why Should You Stay?
Pracownicze Plany Kapitałowe (PPK) operate under the law of October 4, 2018. They are currently one of the key long-term savings programs for Poles, created to build additional financial security after reaching age 60. The program is aimed at employed individuals and involves cooperation with employers. It has a multi-year character, but its structure makes regular savings not a significant burden on the employee’s budget.
PPK Funding Rules: How Much Do Employers and the State Contribute?
One of the biggest advantages of PPK is co-financing of contributions. Funds on a participant’s account come from three sources. Participants have the option to increase their savings. An employee can declare an additional – higher contribution of up to 2% of salary, while an employer can contribute up to 2.5% of the employee’s salary. Employee contributions are deducted from net salary, while the employer’s portion is not subject to ZUS contributions, though it constitutes taxable income.
Withdrawal of PPK Funds After Age 60 – What You Need to Know
Upon reaching the statutory retirement age, a PPK participant can use their accumulated savings without tax on capital gains. The standard withdrawal model assumes a one-time withdrawal of the entire accumulated amount. An alternative is the so-called spousal benefit, available for couples meeting age requirements and having PPK accounts in the same financial institution. It is also possible to transfer funds to a time deposit, provided the ten-year installment payment period is maintained.
Early PPK Withdrawal: Belka Tax and Loss of Contributions
A PPK participant can withdraw their accumulated money at any time, but such decision entails certain financial consequences. In case of withdrawal, early withdrawal is subject to 19% tax on capital gains (Belka tax), and the participant loses all employer and state matching contributions.
PPK Withdrawal for Down Payment or in Case of Illness – Exceptions to the Rule
The legislature has provided two situations where early use of money without negative consequences is possible. This applies to situations such as: withdrawal for the purpose of purchasing or building residential property or for repayment of a mortgage, and withdrawal due to serious illness, disability or loss of capacity to work.
How to Check How Much Money Is in PPK? Logging into the MyPPK Portal Step by Step
Everyone using PPK can check how much money they have accumulated on their account. To do this, simply log in to the official website of Pracownicze Plany Kapitałowe. Employees have two login options: through Login.gov.pl (Trusted Profile, e-ID, mojeID) or through an account created in the service. You then just need to enter your login credentials.