Investors

MANAGING
EMPLOYEE CAPITAL
PLANS

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7 things worth knowing about ECPs

  • An Employee Capital Plan (ECP) is a voluntary long-term saving scheme.
  • The Polish state encourages employees to accumulate savings in ECPs by means of various privileges, such as exemption from the capital gains tax and by making annual state contributions.
  • Both your employer and the Polish state contribute to your ECP savings.
  • You are free to stop or start saving at any time.
  • The assets accumulated in ECPs belong to you – just like savings accumulated, for example, in bank deposits or in investment funds.
  • You may withdraw your savings from the ECP at any time. If you do so before the age of 60, all you lose is the state-granted privileges.
  • The savings accumulated in ECPs will pass to your loved ones in the event of your death.
Download the brochure “The ECP at your company”

Savings for your retirement accumulate in an Employee Capital Plan from contributions made by you, your employer, and the Polish state. The savings gathered in your ECP account is capital you fully own, and is inheritable.

Let your employer and the state help you save

Watch your savings grow

  • By participating in an ECP, you will accumulate more money than when saving on your own.
  • You can withdraw money in certain exceptional situations in life:
    • if you, your spouse or a child fall seriously ill (then you can withdraw up to 25% of the savings accumulated, without being obliged to pay it back in),
    • to cover the down payment on a mortgage to build a house or apartment (up to 100% of the savings accumulated, with an obligation to repay it in interest-free installments over 15 years – this applies to individuals less than 45 years old).
  • You can also withdraw you savings at any time. The only part you will lose then is the state privileges awarded to ECP participants (see details).
See how much you can save

Effects of saving in an ECP through the age of 60*

* Source: mojeppk.pl. Simulations based on these assumptions: no additional payments, annual rate of return in the saving period – 3.5%, annual rate of return in the withdrawal period – 2.75%, annual salary increase – 2.8%. Since Piotr earns less than 120% of the minimum wage, he has opted to pay only 0.5% of his gross salary into the ECP. Management fee of 0.42% annually, according to the table of average fees for managing ECP funds published by PFR Portal PPK on 15.06.2020.

Invest with the best

The money accumulated in your ECP account will be managed by us – Investors TFI.

We have been managing investment funds for nearly two decades, and our excellent performance has repeatedly led independent specialists to name us Poland’s number-one fund management company.

“Best fund management company” in 2017, 2018 and 2019 – business intelligence source Analizy Online
“Best fund management company” in 2016, 2017, 2018 and 2019 – leading Polish daily Rzeczpospolita
“Best fund management company” in 2013, 2016 and 2018 – top Polish business daily Parkiet

Learn more
about ECPs

Employee Capital Plans kicked off in 2019, so they are still quite new for everyone. That is why we have prepared answers to the most frequently asked questions.

Download the brochure “The ECP at your company”

What are the benefits of an ECP?

  • Apart from you, both your employer and the Polish state (the “Labor Fund”) will also contribute to your savings.
  • ECP savings are exempt from capital gains tax (which is levied on profits from most bank deposits, including the interest accrued on a bank account).
  • The savings accumulated in ECPs are and will remain rightfully yours.
  • As an ECP participant, you will generally make a basic contribution of 2% of your gross salary. This is deducted from your net earnings.
  • If you earn less than 120% of the minimum wage, however, you can lower the ECP contribution to between 0.5% and 2% of your salary.
  • It is also possible to contribute more – you can opt to make voluntary additional payments (for up to another 2% of your gross salary).
  • Participants are entitled to receive the welcome payment from the Polish state (PLN 250) if they jointly fulfill 2 conditions: remaining an ECP participant for at least 3 full months, and paying in the basic contribution for at least 3 months during their participation period. The welcome payment is made via the Polish Development Fund (PFR), within 30 days after the end of the quarter. The welcome payment is a one-time benefit, regardless of how many different ECPs one participates in.
  • The annual state contribution (PLN 240 for each year of ECP participation) will be paid to nearly all ECP participants (with some exceptions as described in the ECP Act), provided that at least the minimum amount stipulated in the ECP Act is paid into their ECP account during the given calendar year, i.e. at least 3.5% of the amount constituting 6 times the minimum monthly salary. (In 2021, the minimum monthly salary is PLN 2,800 and so the sum of ECP payments entitling one to receive the annual state contribution is PLN 588). If a participant declares a lower basic payment (in view of their lower income), it is sufficient if at least 25% of the amount of basic payments due on 6 times the minimum salary is paid into their ECP account in the given calendar year (in 2021, this is 25% of PLN 588 – in other words PLN 147). Each participant is entitled to only one additional payment per year, regardless of the number of ECP accounts held.
  • No, they are not. The welcome payment and annual payments from the Polish state are tax-free.
  • In addition to your contributions, your employer makes additional payments into your ECP account (at least 1.5% of your salary). You have to pay income tax on this payment (depending on your annual income, at a rate of 17% or 32%).
  • Example: You earn a gross salary of PLN 3,800 per month. Your basic contribution is PLN 76, and your employer contributes an additional PLN 57 monthly into your ECP account. If you do not have any other income (so you are in the 17% income tax bracket), you will owe PLN 10 in income tax on the employer contribution. This will be calculated and deducted from your salary by your employer. Remember that you will receive non-taxable annual payments from the Polish state in the amount of PLN 240. You will not directly bear any other costs related to your ECP participation.
  • If you are more than 18 and less than 55 years old, you will automatically become an ECP participant. However, you can opt out at any time by submitting a relevant declaration to your employer.
  • If you are 55–70 years old, you should declare your desire to participate in the company’s ECP by submitting an application to your employer.
  • If you are over 70 years old, you cannot join an ECP.
  • Yes, you can. You can join an ECP and still save on your Individual Retirement Account or Individual Retirement Security Account.
  • Your savings accumulated in the ECP will be managed by Investors TFI. We have been operating in the Polish market for over 20 years. For 19 years, we have been managing Employee Pension Programs on behalf of various companies.
  • We have continually won awards in recognition of our funds’ outstanding performance. Ten times in recent years, Investors TFI has been recognized as Poland’s number-one fund management company.
  • Yes, you can. You may opt out of the ECP at any time, while retaining the right to your savings.
  • If you decide to stop making contributions to the ECP and at the same time want to withdraw the accumulated savings, you will lose all the State-awarded privileges for ECP participants (the state-contributed welcome and annual payments, the exemption from capital gains tax, and the waiver of Social Insurance Institution (ZUS) premiums due on the employer’s contribution). In other words, you can withdraw your savings after the amounts due to the State Treasury and the Social Insurance Institution (ZUS) are deducted.
Your employer is obliged:
  • to enter into an ECP Management Agreement and an ECP Operating Agreement in the name of and on behalf of employees;
  • to calculate, collect and transfer ECP contributions for all participants;
  • and to automatically re-enrol individuals who have previously opted out of ECP participation (this must be done every four years, for the first time on 1 April 2023).
  • No, it does not. ECP contribution payments are fully invested in the sub-funds of your choice.
  • Investors TFI charges only a small fee for the management of ECP sub-funds. This fee ranges from 0.39% to 0.47% annually, depending on the sub-fund.
  • The management fee is factored into the participation unit price published on the Investors TFI website. Therefore, the value shown on your ECP account is already the actual amount of your savings.
  • If you are an ECP participant, both you and your employer must pay a basic contribution: you contribute 2% of your gross monthly salary (if you earn less than 120% of the minimum wage, you can reduce your contribution to 0.5% of your gross salary) whereas your employer contributes 1.5% of your gross monthly salary.
  • Additional contributions are optional and can be paid in by you (up to an additional 2% of your gross monthly salary) and by your employer (up to an additional 2.5% of your gross monthly salary).
  • Yes, they can. Different additional contribution rates (capped at an additional 2.5% of an employee’s gross monthly salary) can be applied to different employees based on the company’s remuneration policy or the collective labor agreement.
  • Yes, you can. You are free to change the additional contribution amount or discontinue paying it altogether.
  • To this end, you need to submit a relevant declaration to your employer.
  • Your additional contributions are tax-free.
  • Income tax must be deducted only from the additional contributions made by the employer.
  • A “withdrawal” may be made at the request of an ECP participant and is available in the following cases:
    • when the participant reaches 60 years of age,
    • to cover one’s own down payment when building a house or buying an apartment, with the obligation to pay it back into the ECP within 15 years (applies only to persons under 45 years of age),
    • when the participant’s spouse or child is seriously ill (up to 25% of the funds accumulated).
  • A “transfer withdrawal” can be made:
    • into another ECP account (e.g. when changing employer),
    • into a savings or term deposit account of the participant after the participant reaches the age of 60 (provided that there is a provision in the deposit operating agreement which allows the participant to make use of the funds in the same way as in the case of a withdrawal from the ECP),
    • into an Individual Retirement Account (IKE) of a deceased ECP participant’s spouse or to an Individual Retirement Account (IKE) of an authorized person,
    • into an Employee Pension Program account kept for a deceased ECP participant’s spouse or for an authorized person,
    • to a life insurance company (provided the participant has entered into an agreement with this company under which he or she will be entitled to a temporary or lifetime allowance after reaching the age of 60),
    • into a savings term deposit or a term deposit of an ECP participant’s spouse or former spouse (in the event of divorce or marriage annulment, provided that the spouse does not have an ECP account).
  • A “repayment”, in turn, is any case when funds accumulated in the ECP are taken out before reaching the age of 60, other than a “withdrawal” or “transfer withdrawal”.

When can I fully use the funds accumulated in the ECP?

  • After reaching 60 years of age you may withdraw:
    • 25% of the accumulated savings in a single payment and 75% in at least 120 monthly instalments (i.e. over 10 years), or
    • at the Participant’s request, in a smaller number of instalments (fewer than 120), but after having paid the capital gains tax.
  • Yes, you have full right to dispose of your ECP savings during the whole time of your participation. If you want to make a repayment and take out your funds before the age of 60, you will lose the right to the incentives which the Polish state provided ECP participants (the welcome payment and annual payments from the state, exemption from the capital gains tax, and the waiver of Social Insurance Institution (ZUS) premium due on the employer’s ECP contributions).
  • If you are under 45 years old, you can use the ECP savings as a down payment for a mortgage for housing. You must pay this money back into the ECP within 15 years (if you do so, there will be no extra cost).
  • If you, your spouse or child fall seriously ill, you have the right to withdraw 25% of your ECP savings without any consequences and without any obligation to pay this sum back into the ECP.
  • Yes, you can. Repayment or withdrawal of ECP savings does not interfere with contributing further savings.
  • If you start to withdraw money from the ECP after turning 60, you cannot further contribute to the ECP and you will not receive annual payments from the Polish state.
  • Yes, they are. The savings accumulated in the ECP will be paid out to persons indicated as beneficiaries. It is possible to submit a statement naming your beneficiaries. If you do so, the ECP savings will not form part of your estate.
  • If an ECP participant was married at the time of death, some of the funds (to the extent that they were the joint property of the married couple) will be transferred to the ECP, IKE or PPE (Employee Pension Program) account of the deceased participant’s spouse.
  • If no beneficiaries were named, the money accumulated in the ECP will be included in the estate and subject to inheritance on general terms.
  • If you change jobs, you must inform your new employer that you are an ECP participant. If the new workplace operates an ECP and you do not object, your savings will be transferred there free of charge.
  • You may opt not to consent to the transfer of savings to the new ECP. This means that the funds accumulated in your current ECP will remain there and as a result you may end up with more than one ECP account.
  • Contributions from the employer and Polish state are only credited to the ECP account with your current employer. If you are employed by two employers, these payments will be made to the ECP account that was created for you at an earlier date. If both were created on the same day, they will be made to the ECP account where more funds were accumulated.
  • They form part of the assets to be distributed in the divorce proceedings.
  • No, unless a case concerns recovery of maintenance (alimony) claims.

What happens to my contributions to the ECP?

  • The money contributed is allocated to a ‘defined-date’ sub-fund and is invested by Investors TFI – a company present in the Polish market for over 20 years, repeatedly commended for excellent investment results.
  • Contributions (from you, your employer, and the Polish state) are automatically transferred to a sub-fund appropriate for your age. The defined date of each sub-fund (appearing in its name) determines the approximate year in which participants will reach the age of 60.
  • You may decide that you want your contributions to go to other sub-funds of your choice.
  • Investors TFI has created the investment fund ‘Investor PPK Specjalistyczny Fundusz Inwestycyjny Otwarty’ (Investor PPK SFIO) with eight separate defined-date sub-funds:
    • Investor PPK 2025
    • Investor PPK 2030
    • Investor PPK 2035
    • Investor PPK 2040
    • Investor PPK 2045
    • Investor PPK 2050
    • Investor PPK 2055
    • Investor PPK 2060
    • Investor PPK 2065
  • For each of the sub-funds, the statute of the Investor PPK SFIO fund defines the minimal share of the investment portfolio to be invested in stocks (for instance, shares in exchange-listed companies) and bonds (for example in Polish State Treasury bonds), depending on the amount of time that remains until the date mentioned in the name of the sub-fund. In the case of each sub-fund, during the entire period of its operation, there remains a certain part of the portfolio for which decisions about which class of assets it should be invested in are left up to the fund managers. The rules governing the portfolio allocation are presented in the table below.

  • Each ECP participant will be assigned to a sub-fund appropriate to their age. Under the ECP Act, a specific defined-date sub-fund is meant to be used by persons who will turn 60 in the year specified in the name of the sub-fund, as well as for persons who will be 2 years older or younger at that date.

  • As the history of the financial markets shows, in the long run, stocks are more profitable than bonds. Therefore, young people, for whom retirement is a distant future prospect, should have a greater share of such instruments in their pension portfolio.
  • On the other hand, the basic investment principle is that there is a higher risk associated with a higher potential return. This risk translates into higher volatility of stock valuations than those of bonds. Thus, the closer to the end of a person’s professional career, the more their pension savings portfolio should consist of bonds.
  • It is precisely on this principle that the investment policy of the defined-date sub-funds is based. Each ECP participant starts to save in a sub-fund, whose division of assets between stocks and bonds is adjusted to their age. Later on, over time, the share of stocks declines so that in the final phase it amounts to no more than 15% of the total assets of the sub-fund.
  • You may change your decision about which defined-date sub-fund your contribution goes into by submitting an instruction to change the allocation of deposits.
  • You can also change your decision on which sub-funds you want to invest your already accumulated funds into by giving an instruction to change the portfolio structure.
  • No fees will be charged for such changes.

What do I have to do to become an ECP participant?

  • If you are 18–55 years old, you will automatically become an ECP participant. So, you do not need to do anything for this to happen.
  • If you are 55–70 years old, you must declare your desire to participate in the ECP by submitting a relevant declaration to your employer. A sample declaration can be found at naszeppk.investors.pl
  • In order to opt out of contributions to the ECP, you must fill in a relevant declaration and submit it to your employer. A sample declaration can be found at naszeppk.investors.pl
  • Every 4 years (as of 2023) your employer will automatically start making ECP contributions on your behalf again. If you do not wish for them to do so, you must re-submit your opt-out declaration.
  • On the Investor Online website. If your employer has provided us with your e-mail address or telephone number, you will receive a package enabling you to activate access to this website. Otherwise, you will receive instructions on how to enter into an Agreement on using Investor Online.
  • Via the Investor Phone service by calling (22) 355 46 65 (as long as you have a phone support PIN).
  • Any orders concerning changes in the amount of payments, opting out of participation in the ECP or re-enrolment in an ECP should be submitted to your employer.
  • Other orders (e.g. change of investment method, change of contact details, orders concerning the accumulated funds) should be submitted via Investor Online or Investor Phone.
  • Remember that if you wish to name beneficiaries to the Fund, this must be done in writing. You can use a ready-made form for this purpose or you can initiate such an order via the Internet or over the phone.
  • All declarations needed to submit orders in writing can be found at nasze.investors.pl
  • If you do not have the ability to print them out yourself, the declarations are also available from your employer.

The material presented herein is solely for informational and educational purposes; it does not constitute an offer to enter into an ECP Management Agreement or an ECP Operating Agreement and it does not constitute a binding basis to conclude such agreements in the future.

Any conclusions drawn on the grounds of the information herein should not constitute the sole basis for any investment decision. This material does not provide comprehensive information for assessing the risks related to investing in fund participation units of Investor PPK SFIO sub-funds. It should not constitute independent grounds for making a decision to enter into an ECP Management Agreement or ECP Operating Agreement. Decisions concerning investments in investment funds should be based on information that covers, in particular: a description of risk factors, the distribution rules of participation units, handling fees and detailed tax-related information, as disclosed in the Investor PPK SFIO Information Prospectuses for each fund, available at the offices of Investors TFI S.A. and on the websites investors.pl and naszeppk.investors.pl.

The previous results of investment funds are generated in a specific historical context and do not guarantee that similar results will be generated by the Investor PPK SFIO fund in the future. Neither Investors TFI S.A. nor the funds it manages guarantee that the set investment objectives of the funds will be achieved. The profits generated by investments in the funds’ participation units are subject to capital gains tax pursuant to the Polish Act of 26 July 1991 on personal income tax. The value of investment units may be subject to volatility; therefore, fund participants should be aware of the potential for partial loss of deposited capital.

Investors TFI S.A. is an entity doing business on the basis of a license granted by the Polish Financial Supervision Authority (KNF), decision number DFI/W/4030-30/1N-1-3432/05 of 12 July 2005, allowing for the establishment and management of investment funds, including brokerage in the sale and redemption of participation units, representing such funds in external contacts and managing collective securities portfolios. Investors TFI S.A. has been listed in the Employee Capital Plan Registry kept by the Polish Development Fund (Polski Fundusz Rozwoju S.A.) with its registered office in Warsaw. The fund Investor PPK SFIO (Investor PPK Specjalistyczny Fundusz Inwestycyjny Otwarty) was listed in the registry of investment funds on 24 April 2019 with number RFi 1643.

The content of this website was prepared based on the state of knowledge as of 30 June 2020.