Although economic experts generally speak positively about Employee Capital Plans (PPK), the program has been rather uphill from the start. Many people did not believe that systematic saving would be financially efficient for them, and experiences with Open Pension Funds (OFE) and other capital funds caused a significant part of eligible employees to decide against using the PPK. So, how does the situation look several years after the program was implemented? – “Participants in the program are increasingly taking advantage of the opportunity to withdraw funds prematurely. The year 2024 is record-setting in this respect,” admits Paweł Skotnicki, an insurance expert.
Experts talk about the Loss of the Savings Effect
Regarding the payouts of funds saved in the Employee Capital Plans, recent months have been record-breaking. Economic experts acknowledge that despite this, the project remains attractive for consumers.
“We are not on the defensive, these programs still enjoy great popularity among salaried employees. Most often those earning an average salary,” says Paweł Skotnicki. “The impression of the defensive may be misleading, although it is true that in the second quarter of 2024 the number of payouts from Employee Capital Plans was the highest in history,” says the expert.
Paweł Skotnicki adds that the situation, however, requires some public discussion. Employee Capital Plans were constituted as a project encouraging saving and planning for long-term retirement security. It now serves many people quite differently.
“People are rather supplementing their household budget with PPK money, losing benefits in the form of subsidies from the state treasury or the employer. Pressing present seems to be more important than the vision of saving money for retirement,” admits Paweł Skotnicki, an insurance expert and economic adviser.
This means that many people are using the PPK to mend their household budget, pay for a vacation, make renovations, or simply patch budget holes.
“Many people only recently found out that money from the PPK can be withdrawn. True, the value of savings is then lost, but when someone needs current funds, they are satisfied,” admits Paweł Skotnicki.
PPK is not OFE. “The money is private”
Experts point out that the future of Employee Capital Plans may require discussion. The problem is not only using funds from the PPK for current life rather than saving for retirement, but also the fact that society fears that if the PPK is liquidated, their money will be lost.
“That discourages consistency. We hear about the budget deficit, about high inflation, about problems in the health care system. Lack of trust in such financial tools can generate a greater temptation to withdraw, not save,” says Paweł Skotnicki.
“In 2014, to save the state budget, the funds from the OFE were nationalized. Some fear such a solution, although it seems impossible to implement. Money in the PPK is completely private,” adds the expert.
At the same time, a serious threat to the future of the PPK may also be the fact that Poles will not treat this project as an incentive to save. As a result, Employee Capital Plans, though they will be positively evaluated by society, will not fulfill their basic pension role.
Source: https://managerplus.pl/rekordowe-wyplaty-z-pracowniczych-planow-kapitalowych-polacy-wspieraja-tymi-pieniedzmi-domowe-budzety-34564
