Pension
The current pension system in Poland consists of three pillars. The Social Insurance Agency manages the funds in the first pillar. The funds are not invested, although they are recorded on the insured person’s individual account and are subject to valorization. The second pillar is based on the operations of Employee Capital Plans (PPK), whose task is to trade and multiply the fund. The third pillar consists of Individual Retirement Accounts (IKE). The first and the second are mandatory, while participation in the third one is voluntary.
The normal retirement age is 60 years for women and 65 years for men, with the required insurance period of 20 years (women) and 25 years (men). Pension is calculated according to the number of contributions and the returns from investments divided by the life expectancy of the insured. The base amount is PLN 7,140.52 (Polish złoty). The minimum old-age pension is PLN 1,878.91 per month.
Pensioners are entitled to a 13th and, depending on their income level, a 14th supplement each year.
Dependents/Survivors Benefits
A survivors pension is awarded to the survivors of a deceased insured person who was entitled to an old-age or disability pension. When the right to a survivors pension is established, it is assumed that the deceased person was completely incapable of work. Children, grandchildren, spouse, and parents are eligible to receive benefits.
The survivors pension is payable to all eligible family members in one total amount, divided among the survivors. The minimum survivors pension is PLN 1,878.91 (Polish złoty). A supplement of PLN 654.48 per month is paid to an orphan who has lost both parents.
In case of the death of an employee during the period of employment or during the collection of termination benefits as a result of incapacity for work due to illness, the family is entitled to severance pay that is dependent on the deceased person's period of employment.
Invalidity Benefits
In the case of permanent incapacity/disability, the insured is entitled to a permanent disability pension. The required insurance period depends on the age of the employee at the time of disability. The disability pension is composed of the following:
- 24% of the base value, i.e., 100% of the average salary
- 1.3% of the disability pension base for each contribution year
- 0.7% of disability pension base for each non-contribution year
- 0.7% of the disability pension base for each year (to a maximum of 25 years until the worker reaches the age of 50)
In the case of permanent partial incapacity, the disabled worker will receive 75% of the total disability pension. In the case of temporary disability, workers are entitled to 100% of their average earnings in the last 12 months before the disability began up to 182 days (may be extended to 270 days).