New pension programs to boost GDP growth by 0.3-0.4% - PFR head

Poland hopes to put PLN 15-20 billion a year into capital markets as a result of its new employer-sponsored pension program, according to the CEO of state investment vehicle PFR Paweł Borys. “They will strengthen the financial base of the corporate sector and bring an increase in the long-term economic growth outlook for about 0.3 - 0.4 pps annually,” he said. The new program, seeking to have firms and employees put a total of 3.5 percent of gross wages into privately managed Employee Pension Plans (PPK) – 1.5 percent from the employer and 2 percent from the employee. Workers will also have the right to opt out of the program, yet according to government’s estimates, 75 percent will choose to be a part of the plan. It should come into force at the beginning from 2019 for large companies, mid-2019 for mid-sizes and mid-2020 for others, according to Borys. Additionally, the state will add PLN 240 per year to each account on top of the PLN 250 start-up bonus, which according to calculations will cost the budget PLN 1.1 billion in 2019, and PLN 2.5-3 billion afterward.