On 4 October 2018 the Sejm passed the act on employee capital plans (ECPs)
The main assumptions regarding ECPs remained unchanged
Employer Zone: taxes and law 20/2018 | October 5th, 2018
The proposed amendments regarding the postponing of the obligation to introduce ECPs were rejected. The act is to enter into force at the beginning of 2019, and the first companies (those employing more than 250 people) will be required to introduce ECPs half a year later, i.e. from July 2019. In the last step, starting from January 2021 companies employing fewer than 20 people and entities being a part of the public finance sector will be required to introduce ECPs. According to the act employed persons also include contractors and service providers, as well as members of supervisory boards.
The Sejm adopted an assumption providing a release from the obligation to introduce ECPs for those companies which will register an Employee Pension Plan (EPP) before the ECP obligation is imposed on them, provided that such EPP anticipates a premium of at least 3.5% of remuneration and the number of participants reaches at least 25% of the people employed by a given employer.
The basic premium for an ECP will amount to 3.5% of the remuneration constituting the basis for the calculation of contributions for pension and disability insurance, of which 2% will be paid by the program participant and 1.5% the employer. Participants of an ECP whose remuneration from various sources in a given month does not exceed the amount corresponding to 1.2 times the minimum wage will be able to reduce their payment to 0.5%. The act also provides for a one-time welcome payment in the amount of PLN 250 and an annual payment of PLN 240 financed from the State Treasury.
In order to introduce an ECP companies will have to conclude a management contract for a ECP with a financial institution. Despite the discussion in the Sejm, the choice of such institution must be made in agreement with the trade union(s) active at the company, or with the representation of the employees if no trade unions are active there. Only in the absence of an agreement one month before the obligation to conclude a contract for the management of ECP will the company will be able to make its own choice in this respect.
The Act provides for fines for non-compliance with its provisions, including up to PLN 1,000,000 for, inter alia, for not concluding a contract for ECP and for not enrolling an employee to it or for failing to submit the required data, as well as up to 1.5% of the remuneration fund in the preceding business year for failing to enter into a ECP management contract or persuading an employee or a ECP participant to withdraw from saving with the ECP. However, the Sejm decided that an employer will not be liable for the lack calculation or incorrect calculation, collection or payment to an ECP if that is caused by incorrect information being provided by an employee.
The act will now be passed over to the Senate, which will also have the opportunity to introduce its own amendments. Due to the short timeframe for the planned entering into force of the Act, the Senate's decision should be expected soon. It is therefore worth getting ready for new responsibilities and additional costs. Deloitte’s experts have developed materials that can help in this area.