Poland tweaks pension plan draft to allow pension fund managers, life insurers to manage

Poland will allow pension fund managers and life insurers to manage employer-sponsored pension schemes PPK, according to a new draft bill. It also lowers the minimum employee contributions for lowest earners will be reduced to 0.5 percent of the wage base from the previous 2 percent to encourage lowest earners to save. The bill also increases equity requirement for PPK managers to PLN 25 million from previously assumed PLN 10 million, as well as lowers the cap on fees passed by PPK managers to PFR. According to the project, the total value of investments in assets denominated in foreign currencies will not exceed 30 percent of the value of the assets of the investment fund or pension fund. The project abolishes restrictions on the use of so-called short selling and investing in metals. It also introduces the possibility of investing in commodity derivatives, allows for investing some of the assets in products based on real estate, venture capital funds, private equity, and investment funds using absolute return strategies. You can invest up to 10 percent in the aforementioned alternative investments, and up to 30 percent in foreign assets. Financial institutions will pay a fee for creating and maintaining a PPK portal (initial fee) and a fee for participation in the PPK portal (annual fee). The project states that “the portal operator cannot make a profit due to the initial fee and annual fee paid to it,” The initial fee should not be higher than 750,000 PLN for one financial institution, and the annual fee should not be higher than 0.075 percent. assets accumulated in PPK managed by financial institutions placed in the PPK records.