State to receive part of the PPK funds in case of divorce

In the case of divorce, some of the money accumulated in the employer-sponsored pension schemes PPK will be taken over by the State Treasury, the ministry of finance informed. This applies to a spouse who is not a member of the PPK, but because of a divorce is entitled to the payment of part of the funds paid during the marriage. According to the Ministry of Finance, the solution eliminates the risk that a person who has never participated in a PPK will receive bonuses and preferences for system participants in the event of a divorce. “The solution proposed in the draft law regarding the distribution of funds from the PPK in case of divorce is the same as it was proposed in the case of standard prior cash withdrawals. We would like to remind you that the participant can at any time resign from participation in the PPK and pay out the funds collected by them. As well as 70 percent of the premiums financed by the employing entity along with the generated profit less income tax, as well as without a welcome contribution and annual subsidies from the state (PLN 250 for start and PLN 240 per year),” the ministry explained. “Therefore, by analogy, according to the provisions of the PPK act, a person who did not participate in the PPK, after divorce and division of property, will receive half of the funds accumulated by the spouse, that is half of the amount she would receive in the event of resignation from participation in the PPK. The solution eliminates the risk that a person who has never participated in a PPK would receive bonuses and preferences for system participants in the event of a divorce,” the ministry added. The new program seeks 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. 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. In total, some 11.4 million employees would automatically become members of the opt-out system.