Occupational pension schemes form part of third, voluntary pillar of Polish pension system. Employers may choose to provide such a scheme to allow their employees to accumulate additional financial means for retirement. Despite the fact that occupational pension schemes have existed in Poland since 1997, they remain a rarely used form of saving. Data gathered by the Polish Financial Supervision Authority for 2014 indicates that only 2.38% of employed persons participated in an occupational pension scheme.

Aim of this article is to characterise occupational pension schemes in Poland, to evaluate funds which can be accumulated for different saving options and to propose different forms of benefit payments from such schemes. Benefit amounts that could be paid as a lump sum (a benefit payment form currently available in Polish occupational pension schemes), as well as lifetime annuity (a common benefit payment form from pension schemes abroad), are presented. Calculation results show an impact of factors such as retirement age and rate of investment returns on the benefit amount. A comparison with funds which could be accumulated from individual financial savings is also included.

Results of the research show that although comparable benefit amounts can be obtained by individual financial savings, occupational pension schemes offer several advantages. Basic contributions are financed and paid by the employer on behalf of the employees, ensuring regularity of savings. Funds accumulated in a scheme can only be paid out after employee has reached a certain age (typically 60), providing benefits at a retirement age. Disadvantages include lack of benefit payment forms such as lifetime annuity, which could be used by employees to protect themselves against longevity risk.

References:

1. Pracownicze programy emerytalne w 2014 roku, Urząd Komisji Nadzoru Finansowego, Warszawa, czerwiec 2015.

2. Ustawa z dnia 22 sierpnia 1997 r. o pracowniczych programach emerytalnych, Dz.U. 1997 Nr 139 poz. 932.

3. Ustawa z dnia 20 kwietnia 2004 r. o pracowniczych programach emerytalnych, Dz.U. 2004 Nr 116 poz. 1207.

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