Obligatory “auto-enrollment” to Employee Capital Plans (PPK) from April 1st, 2023.

In 2023, the first “auto-enrollment” to Employee Capital Plans (PPK) will take place.
Author:
Marta Michalik
Senior Payroll Specialist and Implementation
Beata Bar
Payroll Manager

As of April 1st, 2023, the employer is obliged to make PPK contributions for all people who have previously submitted a declaration of opting out of PPK contributions, unless an employee again opts out of contributing to PPK (the person must submit a declaration of opting-out to their employing entity).

Employers, to fully implement the PPK program in their company, are required to sign two documents with the PPK Institution:

  • PPK management agreement with the financial institution;
  • Contract for running PPK with employees and contractors.

Employers, with whom all employees previously submitted a declaration to opt-out of PPK, may have not concluded the second agreement - on the creation of PPK. In this case, the Employer should, in the first half of March 2023, conclude an agreement on having PPK with the PPK Institution.

The “auto-enrollment” date is the same for all employing entities, regardless of when they decided to implement the PPK program in their company.

By 28.02.2023

The employer is required to inform all their employees who decided to discontinue making further salary contributions to the PPK program about the program’s “auto-enrollment.”

  • “Auto-enrollment” applies to all employees who submitted a resignation from making contributions prior to having a contract on participating in PPK signed on their behalf;
  • Information about automatic re-enrollment should also be delivered to PPK participants who submitted a declaration of opting out of PPK contributions while already saving through PPK.

Important: Consecutive notifications will have to be sent every 4 years, i.e. by the end of February 2027, by the end of February 2031, etc.

Exception:

The employer’s obligation of informing employees does not included people who submitted a resignation of continuing PPK contributions and will be 70 years old by the 1st of April. The employer, in considering the situation of such an employee, may deliver information concerning the employee’s entitlements concerning saving through PPK.

The PPK Act does not specify how exactly an employer should fulfill their obligation of informing employees. However, it should be noted that an employer should do it in such a way as to prove, in case of a dispute, that the obligation imposed by the PPK Act has been fulfilled.

Important: Informing employees about the “auto-enrollment” well ahead of the deadline will not constitute a fulfillment of obligations as specified in art. 23(1) in the PPK Act.

The employer has an obligation to inform their employees about “auto-enrollment” by the end of February 2023. Providing this information well ahead of this date will be an acceptable form of educational measures, but it will not be considered as the fulfillment of the obligation to inform.

What does “auto-enrollment” mean and who does it concern:

An employer does not have to obtain an employee’s consent to enroll them in the PPK program. This means that when an employee does not submit a declaration about opting out of PPK contributions, he/she will be automatically enrolled in the PPK program. An employee may later opt out of PPK participation - participation in PPK is completely voluntary for the employee.

Automatic enrollment only concerns people who are between 18 and 55 years of age.

Example: An employee who was 30 years old was not a participant of PPK because he managed to submit a declaration to opt out of PPK prior to the date of enrollment. If the employee didn’t later submit a declaration to participate in PPK, the employer will inform him on February 2023, that these contributions will be made on his behalf starting from the 1st of April. For this to be possible, the employer will have to sign a contract on PPK participation on the employee’s behalf - unless the employee again submits a declaration of not making PPK contributions.

Employees 55+:

People who are over 55 but under 70 years old, and want to participate in the PPK program, must apply to their employer on signing a contract to participate in PPK on their behalf. After receiving the application on signing a contract to participate in PPK or making PPK contributions, the employer will be obliged to implement these requests. This will be concluded not within the “auto-enrollment,” but on general rules. The employee will make PPK contributions on behalf of these employees on the date depending on when the appropriate application was submitted.

Who may not be enrolled in PPK:

People who are over 70 years old may not be enrolled in PPK.

Declaration on resigning from making PPK contributions:

After the 1st of March 2023, employees between 18 and 55 years of age may submit a declaration on resigning from making PPK contributions.

  • The declaration of resigning from making PPK contributions requires a written or qualified electronic signature.

The declaration on resigning from PPK contributions becomes valid from the moment of its submission. This means that when this declaration is submitted, the employer may not make any PPK contributions.

Example: a PPK participant submitted a declaration of resigning from making contributions in August 2021. This declaration will be valid until the end of February 2023. By the end of February, the employer should inform this participant about the automatic re-enrollment and resuming of contributions starting from April 1st, 2023. If the employee, after receiving this information, again resigns from making contributions to PPK by issuing the appropriate declaration, these contributions will not be made. The next re-enrollment to PPK will occur on the 1st of April 2027.

  • The declaration on opting out of PPK contributions may be revoked at any time by applying for PPK enrollment to the employer.

When does the employer make contributions to PPK:

Contributions to PPK are made starting from the month following the month when the employee applied for PPK participation. These contributions should be calculated and collected in the month when the application was submitted and paid in the following month.

In case an employee, on behalf of whom an employer has not signed a contract on PPK participation due to them submitting a declaration on opting out of PPK contributions, applies for making PPK contributions and has the required period of employment, the employer should sign a contract on PPK participation immediately upon receiving such a request.

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