Future pensions. The reform can be obtained by sole proprietors.
Employees are to collect money for their future pensions on special accounts – employee capital plans (PPK). They will save 2% there. net salary, and the employer is to pay extra 1.5% It will be possible to raise premiums – by the employee by a further 2 percent, and employers – by 2.5 percent.
The total minimum premium may thus amount to 3.5 percent and the maximum 8 percent. This is the result of the draft Act on PPK, which the government submitted in mid-February for social consultations.
There are also incentives provided by the state: a one-off welcome contribution of PLN 250 and an annual surcharge of PLN 240.
However, the PPK will not be available to a million self-employed people. In return, these people will receive a higher payment limit for individual retirement pension accounts (IKZE). The limit will be 1.8 times the average projected gross remuneration set in the draft Budget Act (normally it is 1.2 times this remuneration).
Currently, self-employed pay a pension premium to ZUS from 60 percent. average salary. If, therefore, they earn more than three fifths of the national average, their pension will be lower than the correspondingly earning employee. Therefore, in order to have adequate income at the end of working life, these people must necessarily save for retirement.
We have checked how the persons employed under a contract of employment, contracts for specific tasks and self-employed will benefit from the planned changes. The calculations were made by Łukasz Kozłowski, chief economist of Employers of the Republic of Poland. He assumed that the salary is 4500 PLN gross (for 40 years), and the real rate of return 3%.
Employee and his PPK
An employee employed on the basis of a contract of employment, paying the minimum contribution to the PPK (2% from the employee plus 1.5% from the employer), will raise capital in the amount of PLN 161.4 thousand. zł. In order not to lose tax benefits, he will be able to retire 40.3 thousand. PLN one-time plus one thousand PLN monthly for 10 years (re-evaluated in the future at the rate of return on other capital).
With this form of payment, the employee will reach a total of 26.2 thousand. PLN tax benefits. This includes: payments from the state (PLN 9.9 thousand), exemption of payments from Belka tax (PLN 14.4 thousand), dismissal of the employee contribution from PIT (PLN 7.8 thousand), payment of an additional PIT from the premium employers (minus PLN 5.8 thousand). The benefits in relation to the sum of contributions contributed will amount to 35.6 percent.
A person who performs work on the basis of a specific work contract (will not be covered by the PPK) may, however, accumulate money on IKZE, but for it the payment limit will remain unchanged. If it will save the maximum possible amount, it will collect 465.6 thousand. zł. The money can be taken anyway after the age of 65 – once or in installments. The fiscal benefits will amount to 59.5 thousand. zł. They consist of: writing down contributions from the tax base of PIT (PLN 41 thousand) and 10%. a flat-rate tax on the payment of money instead of 19%. income tax (PLN 18.6 thousand). The benefits in relation to the sum of contributed premiums is 27.6 percent.
Self-employed, thanks to the fact that he will be able to take advantage of the increased maximum limit of payments on IKZE, he will be able to collect as much as 684.9 thousand. PLN of capital. This sum can be taken after reaching retirement age: either once or in installments.
The self-employed can count up to 89.3 thousand. of fiscal benefits, which will include: writing down contributions from the PIT tax base (PLN 61.5 thousand) and payment of 10%. a flat-rate tax instead of a 19-percent tax (PLN 27.8 thousand). The benefits in relation to the sum of contributions paid will amount to 27.6 percent.
PPK plus IKZE
Calculations show that the self-employed will benefit the most. As Łukasz Kozłowski explains, total sums of capital accumulated on IKZE are much larger than in the PPK, because in the PPK the standard premium is 3.5%, and on the IKZE standard, a maximum of 10% can be paid. (in the case of an average salary) or 15% (self-employed). However, the tax benefits resulting from participation in the TNP are relatively higher – provided that we pay out the funds in the appropriate formula.
However, you need to consider two things. First of all, both the employees and the employer will be able to pay a higher premium to the PPK, which will significantly increase savings. Secondly, participation in the PPK will not exclude collecting money on IKZE (the limit is 1,2 times the average forecasted remuneration). In this way, employees will be able to additionally collect PLN 465.6 thousand on IKZE. zł.
The possibility is not enough
Each of these saving methods has advantages. In the case of IKZE, tax deductions are immediately perceptible when calculating PIT (for the year in which payments were made to the account). As Łukasz Kozłowski explains, the higher the rate of return, the greater the advantage of PPK compared to IKZE. It results from the fact that the payment from IKZE is taxed at 10%. flat rate.
In the case of PPK, it is planned that employees will be automatically saved with the option of resignation. It is different from IKZE. There is total voluntary here. Last year, the average payment to the account was 3.1 thousand. PLN, and the limit was 5.1 thousand. zł.
– In 2017, only 25 percent. having IKZE in Generali made payments in the amount of the maximum allowed limit. Among them only a part runs a business – says Arkadiusz Wiśniewski, a member of the board of Generali Życie. If this does not change, the self-employed will not be able to count on the decent pensions from the third pillar.
– Unfortunately, the problem is that a large part of the self-employed will probably not take advantage of this increased limit – says Marcin Wojewódka, legal adviser, partner at the office of Wojewódka and Partners. – As today, do not use the limit of payments to IKE or IKZE.
The government plans to introduce a PPK
– Employee capital plans (PPK) will be an element of the third pension pillar, along with other forms of additional savings, such as IKE, IKZE or PPE.
– Money from three sources will be transferred to PPK: from the employee, from the employer and a small part from the state budget.
– The capital will be disbursed after reaching the retirement age, but exceptions are provided for this rule.
– A future pensioner will be able to withdraw money before retirement without delay, provided that he returns all benefits (eg subsidies from the state budget).
– The draft Act on PPK assumes that new solutions will be introduced in stages. The earliest, since the beginning of 2019, PPKs are to be created by the largest employers employing over 250 employees. By mid-2020, at the latest, small companies and public finance sector units will start doing so.
– The Ministry of Finance estimates that, ultimately, 8.5 million people will join the program.
– The limit of payments for IKZE for persons conducting business activity is to be raised from the beginning of January 2021.