PPK Assets Surge to PLN 42.6 Billion, But Experts Caution Against Early Withdrawals
Warsaw, Poland - Employee Capital Plans (PPK) have reached a new milestone, with total assets climbing to PLN 42.60 billion at the end of October – a PLN 1.78 billion increase from the previous period. The growth highlights the program’s increasing popularity as a long-term savings vehicle for Polish workers.
According to calculations by the Polish Development Fund (PFR) PPK portal, participants are seeing significant returns on their investments. For an individual earning PLN 5,300 per month in december 2019, with income rising to PLN 7,000 by 2024, profits range from 138 to 198 percent, depending on the chosen fund.
“In practice,this means that today his account has PLN 11,380 to PLN 16,420 more than he himself contributed to the program,” Rzeczpospolita reported.
despite the positive growth, financial experts are urging caution regarding early withdrawals. Marta Damm-Świerkocka, a member of the PFR Portal PPK management board, emphasizes that accessing PPK funds before retirement results in a loss of benefits.
“withdrawing money from PPK for any purpose involves the loss of part of your savings,” Damm-Świerkocka explained.”All state subsidies will be lost,and 30 percent of employer’s payments will be transferred to ZUS as a pension contribution of the program participant. Additionally, a 19% so-called belka tax will also be charged on capital gains.”
Oskar Sobolewski,a pension expert from HRK Payroll,reinforces the importance of viewing PPK as a long-term investment. He advises against tapping into the funds for emergency expenses, except in cases of serious illness, as permitted under the PPK Act.
