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– Today you have to think about the fact that we should save ourselves for future retirement. We can buy real estate and save money in the bank, but there are also a number of financial instruments under the third pillar – assures Dr. Adam Chernyak, chief economist at Polityka Insight.
Along with the decrease in the amount of pensions, interest in such tools as professional retirement programs or employee capital plans will gradually grow. Especially since the solutions available in the market become profitable for the employees.
– The amount of future pensions will grow more slowly than salaries. As a result, the replacement rate – that is, the ratio of a future pension to a previous salary – will be only about 30%. In other words, the amount of the old-age pension will be only 1/3 of our last full-time salary, says Dr. Adam Cherniak of the Warsaw School of Economics, chief economist at Polityka Insight.
It is affected by a number of factors, the most important of which are demographic factors. Both the amount of our pension and the full set of funds that we will have at our disposal to pay money to future retirees depend on how many people will work in the economy, and how much they will pay contributions to the ZUS system on an ongoing basis. Unfortunately, this number will decrease from year to year.
According to the analysis of the Institute of Structural Research, the average replacement rate in Poland in 2060 will be only 24 percent. For comparison, in 2016 it was 61 percent. According to analysts, Poland will record the largest drop in the average replacement rate among all EU countries.
Projections assume that by 2060, for every 100 people of working age (15-64) who work and pay contributions, there will be as many as 68 people over the age of 65. At the moment, there are only 25 elderly people for every hundred Polish workers.
– So the challenges related to pension security are very important and increasingly understood by young people – says Jacek Kowalski, member of the Human Capital Board of Orange Polska.
The level of retirement expenditures, currently around 11 percent in Poland, is also a poor prognosis. gross domestic product. Forecasts of the European Commission assume that the amount will remain at a similar level until 2060. The combination of these two factors will lead to a gradual decrease in the amount of pensions. IBS analyzes assume that in 2060 up to 2/3 of pensions can be paid at the minimum amount.
– Today you have to think about the fact that we should save ourselves for future retirement. Of course we can buy real estate and put money aside in the bank, but there are also a number of financial instruments that the state makes available to us under the third pillar. We’re talking about IKE and IKZE as well as PPE or PPK – the economist lists at Polityka Insight.
– In the coming years, we will witness a decline in the amount of pensions in relation to wages, especially in light of the high rates of inflation. Therefore, more and more Poles will decide to save on their own and apply for programs such as personal protective equipment or PPK offered by employers.
In mid-September, Deputy Chairman of the Polish Development Fund, Bartosz Marczuk, announced that the number of Poles saving under employee capital schemes and employee pension programs has already exceeded 3 million, of whom 0.63 million are participants in personal protective equipment and 2.38 million. – PPK.
Capital plans have been introduced to employees as of 2019 and are mandatory in almost all companies and public organizations. Both the employee and the employer contribute to the future pension under the PPK. The state adds the welcome payment and the annual surcharge. Despite this, many employees choose to opt out of this system voluntarily. The level of participation fluctuates around 30%, and the amount of assets accumulated in it is about 6.44 billion PLN.
Poles keep much more money in employee pension programs, which exempt companies from offering PPK. The first PPE was created over 20 years ago. In this model, the contribution is funded by the employer, and the employee can – although not mandatory – pay an additional contribution.
According to the data of the Polish Financial Supervisory Authority, at the end of 2020, there were exactly 2,110 personal protective equipment in Poland, providing services to employees working in 2,370 companies. The accumulated funds in it amounted to 17 billion PLN. It is also important that in companies working with personal protective equipment, an average of 65.8 percent belong to the program. employees.
The role of employers in securing the future of employee retirement has been important for many years – emphasizes Jacek Kowalski. – In our fund, up to 70 percent. Its members are employees in the age group of 35-54. They have been contributing money to PPE regularly for many years, and on the other hand, we, as a company, are also contributing to their retirement future.
Orange Polska’s employee pension system is one of the longest running on the Polish market, and it was created about 20 years ago. It is also one of the largest – its net assets currently exceed 1.7 billion PLN, or about 10%. The asset value of all PPE operating in Poland.
– The fund is very popular, almost 90 percent of Orange Polska belong to it. Employees and every year this percentage increases slightly – says a member of the Board of Directors of Human Capital at Orange Polska. Every sixth of our employees pay an additional contribution for personal protective equipment. We are working to ensure that these benefits are higher, because a trusted fund guarantees security and future retirement. Departing employees also think about this future and safety, because many of them leave funds under the management of our pension community for a long time.
Orange Polska finances its employees a monthly premium of 7 percent. Total Wages. According to applicable regulations, this is the highest contribution an employer can pay under personal protective equipment. Additionally, employees can choose to make a supplemental contribution thus increasing their total savings. All contributions paid for personal protective equipment go to the individual accounts of the participants, are their property and inheritance, and are managed by the Orange Polska Employees Retirement Association.
– Over the past twenty years, the rate of return has exceeded 235%, while only last year it was more than ten percent. In recent years, we have always achieved a result higher than what the market offered – says Jacek Kowalski. – This is the result of a well-thought-out strategy, investments in different products and different markets, the work of competing managers of our funds, but also a professional board of directors that has been managing the fund for many years – he adds.
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