Old-age pensions in the new scheme

The old-age pension scheme operating under the new rules consists of two subsystems:

• the general pension scheme with the following funds:
  • Social Insurance Fund (Fundusz Ubezpieczeń Społecznych, FUS), managed by a public institution – the Social Insurance Institution,
  • Open Pension Funds (otwarte fundusze emerytalne, OFEs) managed by private institutions – general pension societies (powszechne towarzystwa emerytalne, PTEs);
• voluntary funded pension scheme, managed by private institutions, membership of which is entirely voluntary; in return for an additional contribution, it is expected to secure higher old-age pension benefits in the future.

In the general pension scheme operating under the new rules, an old-age pension is available to persons who meet both of the following conditions:

• have reached the retirement age of 60 years for women and 65 years for men,
• at least one contribution for the old-age pension insurance has been credited by ZUS to their individual insured person account.

The amount of pension according to the new rules is closely related to the amount of paid contributions.

NEW OLD-AGE PENSION FROM FUS = the total amount of the credited old-age pension insurance contributions after adjustment + initial capital after adjustment + funds credited to the sub-account / average life expectancy for persons of an age equal to the retire- ment age of the insured person concerned, expressed in months; according to tables published by the Statistics Poland (Główny Urząd Statystyczny, GUS). 

A woman who has been granted by ZUS an old-age pension from FUS under the new rules and who is under 65 years old, i.e. who has not reached the retirement age for men, receives a temporary funded pension. To be granted such a pension, the value of funds credited to her sub-account at ZUS on the last day of the month preceding the month from which the pension will be granted must be equal at least to 20 times   the amount of the nursing supplementary allowance. From 1 March 2025, the amount equal to 20 times the amount of the nursing supplementary allowance is PLN 6964.40 (20 × PLN 348.22).

The amount of the temporary funded pension is calculated by ZUS by dividing the funds credited to the sub-account by the average life expectancy for people of an age equal to that at which the insured person retires.

If the value of funds from the sub-account is lower than required, ZUS shall add them to the basis for calculating the old-age pension from FUS pursuant to the principles laid down in the Old-Age Pension Act. ZUS shall then calculate the general old-age pension from FUS on the basis of the credited old-age pension insurance contributions after adjustment, the initial capital after adjustment and funds from the sub-account.

The right to a temporary funded pension expires on the day preceding that on which the woman reaches the retirement age envisaged for men, i.e. 65 years. After this date, ZUS will add the funds from her sub-account to the general pension from FUS.

The right to the temporary funded pension will also expire if the funds on the sub-account are exhausted or if the entitled woman dies.

In 2024, ZUS paid out an average of 503.4 thousand temporary funded pensions per month, with the average amount of this benefit being PLN 414.73.

ZUS increases the old-age pension to the amount of the minimum benefit, if:

• the insured man has reached the retirement age and his insurance period is at least 25 years,
• the insured woman has reached the retirement age and her insurance period is at least 20 years.

The initial capital is a component of the pension calculation basis. The period of contribution payments until 1 January 1999 is calculated in this way. ZUS sets the initial capital for each insured person born after 31 December 1948, for whom a social insurance contribution has been paid before 1999.

The Social Insurance Institution calculates the hypothetical pension that such a person would have received on 1 January 1999, according to the old rules. These rules have been modified for the calculation of the so-called social part of the old-age pension. A total amount – composed of a contributory part, a non-contributory part and a social part – is multiplied by average life expectancy for women and men at the age of 62 years. It equalled 209 months. The amount calculated in this way is the initial capital as at   1 January 1999.

The capital is credited to the insured person’s account. It is subject to annual adjustment up to the moment of retirement. The initial capital adjustment is carried out pursuant to the same rules as the adjustment of the old-age pension contributions. 

Open Pension Funds

Until 31 January 2014, participation in the Open Pension Funds (OFEs) was compulsory for persons born in 1969 or later. Currently, people who start their first job can choose whether to join such a fund. Persons who have already been OFEs members between 1 April and 31 July 2016 were allowed to decide whether their contributions – in the years to come – shall be transferred to OFEs or saved on a sub-account with ZUS.Due to the obligation introduced at the very beginning of the operation of OFEs to join them for persons starting their working lives, this group of employees has accumulated the largest number of members and the highest amount of assets between 1999 and January 2014. Due to changes in legislation – the first one in 2011 and the following in 2014 (abandoning the requirement for mandatory citizen participation in this market segment), the number of OFE members is steadily declining.

At the end of 2024, there were eight Open Pension Funds in Poland with a total of

14.5 million members (2023: 14.9 million). The value of the investment portfolio of Open Pension Funds amounted to PLN 208.1 billion.

Source of data: Urząd Komisji Nadzoru Finansowego (The Polish Financial Supervision Authority), Raport o stanie rynku emerytalnego w Polsce na koniec 2024 r. (Report on the state of the pension market in Poland at the end of 2024).

Voluntary funded pension scheme

The voluntary funded pension system comprises the following schemes:

• Occupational Pension Schemes (Pracownicze Programy Emerytalne, PPEs),
• Individual Pension Accounts (Indywidualne Konta Emerytalne, IKEs),
• Individual Pension Security Accounts (Indywidualne Konta Zabezpieczenia Emerytalnego, IKZEs),
• Employee Capital Plans (Pracownicze Programy Kapitałowe, PPKs),
• Pan-European Personal Pension Product (PEPP).

Occupational Pension Schemes (Pracownicze Programy Emerytalne, PPEs)

Occupational Pension Schemes (PPEs) are a voluntary form of group pension saving, organised by the employer with the participation of employees. The basic contribution is financed by the employer, while the employee may declare an additional contribu- tion, deducted from the salary. The funds are transferred by a financial institution chosen by the employer and the employees during the organisation phase of the scheme. This institution manages the deposited funds.

The funds accumulated on the employee's account may be paid out, transferred to another PPE or IKE, or returned. The accumulated savings may be paid out:

• at the request of the employee when he or she turns 60,
• at the request of the employee, when he or she turns 55 and presents the decision on granting the right to the old-age pension,
• without the employee’s request, when he or she turns 70 and has not previously requested the withdrawal of funds,
• at the request of the eligible person in the event of the employee’s death.

In 2024, 56 occupational pension schemes were established.

80% of new PPEs were created as a result of organisational changes on the part of employers and the resulting mandatory continuation of PPEs.

At the end of 2024, the value of basic contributions paid by employers operating PPEs amounted to PLN 3.4 billion. Compared to 2023, PLN 331 million more basic contributions were paid to PPEs (an increase of 11%). An increase in the amounts paid to these schemes was observed in PPEs operated in the form of an agreement with an investment fund (12%) and in PPEs operated in the form of insurance (8%). Basic contributions paid to PPEs operated in the form of an employee pension fund decreased by 1% compared to the previous year.

In 2024, the account of a statistical PPE participant was credited with PLN 6.8 thou- sand (as a basic contribution). The increase in the average annual basic contribution was driven by an increase in the amount of basic contributions paid.

In 2024, the statistical PPE’s participant allocated PLN 150 from his or her own funds for additional payments to PPE (additional contribution). And the average annual value of addi- tional contributions paid, determined only for persons paying the additional contribution (and not for all PPE’s participants), amounted to PLN 1,471, i.e. PLN 142 more than in 2023.

Source of data: Urząd Komisji Nadzoru Finansowego (The Polish Financial Supervision Author- ity), Raport o stanie rynku emerytalnego w Polsce na koniec 2024 r. (Report on the state of the pension market in Poland at the end of 2024).

Individual Pension Account (Indywidualne Konto Emerytalne, IKE)

At the end of 2024, Individual Pension Accounts were maintained by:

• 12 insurance companies,
• 21 investment fund companies,
• 9 brokerage houses,
• 14 commercial banks,
• 5 general pension societies.

A total of 61 financial institutions included them in their offer.

The right to pay contributions to IKE is exercised by an individual who is over 16 years of age. A minor may pay contributions to a pension account in the calendar year in which he or she receives income from work performed on the basis of an employment contract and in the amount that does not exceed such income. One person may have only one IKE.

The contribution to IKE is taxed and the tax is levied on the income from which the IKE contribution is paid. A person who saves in IKE is exempt from capital gains tax.

At the end of 2024, there were 964.6 thousand IKEs in operation with assets of PLN 22.8 billion.

There is an annual limit for contributions paid to IKE. It is an equivalent of 3 times the amount of the projected average monthly wage/salary in the national economy for a given year, specified in the Budget Law or the Provisional Budget Law. In 2024, this limit was PLN 23,472, and in 2025 – PLN 26,019.

The average balance of IKE account in 2024 was PLN 23.6 thousand.

The withdrawal of IKE funds is tax-free. To withdraw funds from IKE, one has to be 60 years old or obtain old-age pension rights and be 55 years old.

Source of data: Urząd Komisji Nadzoru Finansowego (The Polish Financial Supervision Author- ity), Raport o stanie rynku emerytalnego w Polsce na koniec 2024 r. (Report on the state of the pension market in Poland at the end of 2024).

Individual Pension Security Account (Indywidualne Konto Zabezpieczenia Emerytalnego, IKZE)

At the end of 2023, Individual Pension Security Accounts were maintained by:

• 9 insurance companies,
• 21 investment fund companies,
• 9 brokerage houses,
• 3 banks,
• 6 general pension societies.

A total of 48 financial institutions included them in their offer.

The right to pay contributions to IKZE is exercised by an individual who is over 16 years of age. He or she may pay contributions to a pension account only in the calendar year in which he or she receives income under an employment contract and in the amount that does not exceed such income.

A person saving in IKZE may deduct payments to this account from his or her taxable income. One person may have one IKZE.

At the end of 2023, IKZE was held by 514.7 thousand people. The total value of IKZE accounts amounted to PLN 9.2 billion.

There is an annual limit for contributions paid to IKZE, which is an equivalent of 1.2 times the amount of the projected average monthly wage/salary in the national economy for a given year, specified in the Budget Law or the Provisional Budget Law. In 2023, this limit was PLN 8,322, and in 2024 – PLN 9,388.80.

For the withdrawal of funds from IKZE at the age of 65, a lump-sum tax of 10% of income must be paid. This tax also applies to withdrawals from IKZE to the beneficiary in the event of the saver’s death.

Source of data: Urząd Komisji Nadzoru Finansowego (The Polish Financial Supervision Authority), Informacja o stanie rynku emerytalnego w Polsce na koniec 2023 r. (Information on the state of the pension market in Poland at the end of 2023).

Employee Capital Plans (Pracownicze Programy Kapitałowe, PPKs)

The Employee Capital Plans are regulated by the Act of 4 October 2018 on employee capital plans. From 1 January 2021, PPKs automatically cover all employees between 18 and 54 years of age, for whom the employer pays pension contributions. The programme does not cover self-employed persons, uniformed services employees and farmers. Employees between 55 and 69 years of age may participate in the PPKs on the basis of a declaration of intent.

The Employee Capital Plans constitute a compulsory package of employee benefits. The employer is obliged to select an institution running a PPK and to create a PPK for its employees.

Under the PPK, the employee and the employer pay a basic (compulsory) and an additional (voluntary) contribution to the employee’s account. Moreover, a PPK participant may receive a special surcharge financed from the Labour Fund.

The amount of contributions paid to the account of a PPK participant:

A PPK participant whose wage/salary, even from various sources, is less than 120% of the minimum wage/salary, may pay a reduced contribution – from 0.5% to 2% of the gross wage/salary.

Surcharges to PPK participant’s account are financed from the Labour Fund

Each PPK participant receives a welcome payment of PLN 250. In addition, a PPK participant will receive an annual surcharge of PLN 240 if the amount of paid basic and additional contributions is at least equal to the amount of basic contributions due from 6 times the minimum wage/salary. When the basic contribution of a PPK participant is reduced to 0.5%, he or she is entitled to an annual surcharge if the amount of basic and additional payments in a given year is equal to at least 25% of the basic payments calculated in relation to 6 times the minimum wage/salary.

These payments are not included in the remuneration which is the basis for assessing the amount of pension contributions. However, they may be classified as deductible costs.

The funds accumulated in the PPK participant’s account may be invested by the following institutions:

• general pension societies,
• investment fund companies,
• employee pension societies,
• insurance companies.

An institution that creates employee capital plans should:

• have at least 3 years’ experience in the field of management of investment (open-ended) funds, pension funds or open-ended pension funds; the insurance company should have in its offer, for at least 3 years, insurance with investment elements;
• have equity (or eligible own funds) of at least PLN 25 million, with at least PLN 10 million in liquid funds (deposits specified for money market funds);
• operate an appropriate number of defined-date funds or sub-funds.

Each institution that undertakes to operate the PPK is required to establish a minimum of 5 defined date funds. The investment portfolio in each of them should be designed in a way that ensures that the investment risk decreases with the progressive age of a PPK member.

The applicable limits for investment in individual capital tools are the following:

• at least 40% – WIG20 companies,
• maximum 20% – WIG40 companies,
• maximum 10% – other listed companies,
• at least 20% – foreign investment.

In the debt part, the capital may be invested:

• at least in 70% in:
  • securities issued or guaranteed by the Treasury, the National Bank of Poland, local authorities, public authorities or central banks of the Member States, the European Union, the European Central Bank, the European Investment Bank or other securities guaranteed by organisations with a rating recognised by the European Central Bank,
  • deposits with a maximum maturity of 180 days with domestic banks or credit institutions with a rating recognised by the European Central Bank,
• no more than 30% in other assets, of which a maximum of 10% may be invested in instruments that do not have a rating recognised by the European Central Bank.

The financial institution that manages the capital will receive remuneration amounting to a maximum of 0.5% of the Fund’s net assets value and a performance bonus of a maximum of 0.1% of the value of collected assets.

The accumulated funds will be owned by a PPK participant.

Funds may be disbursed to a PPK participant:

• upon reaching by the participant the age of 60 years,
• before the participant turns 60 years of age.

Funds disbursement rules when the participant turns 60

A PPK participant who has reached 60 years of age will not incur additional costs if he or she makes a one-off withdrawal of 25% of the accumulated funds and withdraws the remaining 75% – in at least 120 monthly instalments.

It is also possible to withdraw funds in the form of a matrimonial benefit – if both persons are over 60 years old and have PPK accounts in the same institution.

PPK funds may also be transferred to a term bank deposit if there is a payment in instalments for at least 120 months.

Funds disbursement rules before the participant turns 60

A PPK participant who is under 60 years old will be able to withdraw his or her funds:

• in the case of a serious illness (including malignant tumour, stroke, myocardial infarction, encephalitis, atrophic lateral sclerosis, Alzheimer’s disease, Parkinson’s disease) of the PPK participant, his or her spouse or child; this is a non-refundable payment of up to 25% of the funds accumulated in the PPK account;
• for own contribution [in connection with taking out a mortgage loan] – for persons under 45 years of age; it is a withdrawal of up to 100% of the accumulated capital with the obligation to return it, however, the return may not start later than 5 years from the date of withdrawal and may not last longer than 15 years from the date of withdrawal.

Funds withdrawal before the age of 60 will result in the loss of 30% of contributions paid by the employer (they will be transferred to ZUS) and all surcharges from the government. In addition, the PPK participant will have to pay income tax on capital gains (currently 19%).

Before reaching the age of 60, the PPK member may at any time transfer the funds to another PPK, to IKE or to PPE – his or her own or belonging to an eligible person.

When a PPK participant reaches the age of 60 and starts withdrawing funds, neither contributions nor surcharges from the government will be transferred to his or her account any more – even if such a person continues to work.

Pan-European Personal Pension Product (PEPP)

PEPP is the latest product of the third old-age pension pillar. The Act of 7 July 2023 on a Pan-European Personal Pension Product has been in force since September 2023. The PEPP is a non-employee pension product that is distinguished from other forms of pension saving by its cross-border nature. The PEPP may be offered in all EU Member States by a provider who is authorised to create and distribute it and who is registered in a central public register held by the European Insurance and Occupational Pensions Authority (EIOPA). The pan-European dimension of the PEPP also manifests itself in its transferability between EU Member States and the possibility of changing the supplier. PEPPs may be offered by banks, insurance companies, brokerage entities, asset management companies, alternative investment firms and PTEs. At the end of 2023, this form of pension saving in Poland was offered by only one entity, i.e. the investment company Finax, o.c.p., a.s., based in Bratislava.

There is an annual limit for contributions paid to PEPP. In 2024, it was PLN 23,472, and in 2025 – PLN 26,019.