Employee capital plans – Change of the operating financial institution

In previous Newsletters, we presented the basic principles of the new employee capital plan (PPK) scheme, the main duties, and the possibility of electing not to contribute to a PPK. We take the present opportunity to discuss the key issues entailed in changing the financial institution originally chosen to operate the employee capital plan.

So, when is such a change possible ?

In general, the financial institution operating an employee management plan can be changed in two cases:

• When the PPK participant changes her/his job;
• When the employer changes the financial institution.

Under the default scenario, when an individual commences work with a new employer, funds assembled within her employee capital plan to date are transferred to a PPK account held with the financial institution with which her new employer has executed a relevant contract. Per analogam, if the employer changes the financial institution, the funds assembled on the PPK account of any given employee pass to the PPK account at the new financial institution. Yet there are some variations of these basic scenarios.

Change of workplace by the PPK participant

When a PPK participant takes up work with a new employer, he is obligated to inform his new employer of any contracts for PPK operation executed on his behalf, specifying the financial institutions concerned.

Such a declaration should be lodged by the PPK participant with his new employer within 7 days upon elapse of the 10^th day of the month following that marking 3 months since the PPK participant commenced work with the given employer.

The new employer then notifies the employee of its legal duty to file on his behalf an application for transfer of funds hereuntil assembled on his employee capital plan accounts.

The employee has 7 days to refuse his permission for filing of the application for fund transfer. If the employee withholds his permission:

• The funds hereuntil assembled by the employee remain on his previous PKK account;
• Further contributions (by the new employer) will be credited to the account operated by the financial institution chosen by the new employer.

Change of financial institution by the employer

Change of the financial institution may be effectuated by the employer – the contract for operation of employee capital plan accounts ought to stipulate rules governing its termination and the relevant periods of notice.

Change of the financial institution entails a duty of execution by the employer (on behalf, and to the benefit, of its employees) of a contract for PPK operation with the new financial institution and of filing (again, on the employees’ behalf) of an application for transfer of funds held on existing PPK accounts to such new institution.

An employee may refuse permission for filing of an application for transfer of funds within 7 days of being notified of such a right. Analogously as in the case of change of employer, lack of permission means that:

• The funds hereuntil assembled by the employee remain on his PKK account with the previous financial institution;
• Further contributions by the employer will be credited to the account operated by the new financial institution chosen by the employer.

Should you have any questions or require further information, please contact:

Leszek Koziorowski

l.koziorowski@gessel.pl

Adam Kraszewski

a.kraszewski@gessel.pl