Pensions in Poland in 2020: for Poles and not only

Poland is one of the most developed and prosperous countries in Eastern Europe and the European Union. Its population is more than 38.5 million people as of 2020, and its GDP per capita is 31.4 thousand dollars per year. Despite the fact that Poland is part of the European Union, its main currency is the Polish zloty, not the euro (although the latter is also actively used).

Life in the country is very good for older people; pensioners from many countries go to Poland both for vacation and for permanent residence. Currently in 2020, retirement in the country begins at 60 for everyone.

The first thing people pay attention to is the size of the pension. Oddly enough, it is quite small - on average 2,100 zlotys, which, translated into Russian rubles, will be equal to approximately 30-35 thousand rubles. The pension is far from the largest in Europe, and it is not much larger than pensions in Russia. However, a Polish pensioner will be able to afford a very good life on it in Warsaw or in another large city in the country. Return to contents

Polish pension system

The basic principle of the Polish pension system is that the heavy burden of state social security should be redistributed between the budget and private pension funds.

This led to the fact that contributions for future pensioners began to be transferred in two directions:

• distribution part - 12.22% of salary - insurance payments to the State Social Insurance Fund (Zakład Ubezpieczeń Społecznych);
• the funded part – 7.3% of monthly earnings – funds transferred to open pension funds.

Not all Poles have the right to a funded pension. For this purpose, an age gradation of future pensioners has been introduced, according to which:

• those born before January 1, 1949 will receive a pension accrued in accordance with the joint insurance system that existed before the 1999-2000 reform;
• those born from January 1, 1949 to December 31, 1968 can choose the method preferred for each individual pensioner;
• those born after January 1, 1969 will already receive the pension that the new pension system guaranteed them.

The essence of the 1999 reform is to reorganize the social insurance institution and force citizens to invest part of their funds in open pension funds, thus forming the funded part of their future pension.

At the same time, it was planned that private insurance funds would invest the contributions received in domestic assets or securities, activating the Polish economy.

Everything about the system of taxation and social contributions in Poland is in the article “Taxation of personal income in Poland.”

Retirement age and length of service

The previous Polish government, following pan-European trends, agreed with the need to increase the retirement age to 67 years. It was planned to reach this level for women and men by 2040.

But with the advent of the new coalition, the approach to the issue has changed.

The election promises of the new Polish leaders were embodied in a law in which the retirement age in Poland for women and men was reduced by almost 7 years: to 60 years for women and to 65 years for representatives of the stronger half of humanity.

Having lowered the age for retirement in old age, the minimum length of service required to receive an insurance pension was left at the same level. To do this, a man needs to work for 25 years, and a woman for 20 years, and must pay contributions.

Amounts of insurance pensions in Poland

The minimum insurance pension in Poland is 853 zlotys (equivalent to just over 200 euros) per month (net), but in practice such a low level of pension benefit is established for only 4-5% of elderly Poles, as well as for foreigners who were able to confirm their insurance length of service sufficient to calculate a pension in Poland.

Other citizens receive a little more: the average payment per month ranges from 1500-2000 zlotys.

Payments to disabled people and military personnel

The amount of disability payments depends on the nature of the health damage. Those who have partially lost their ability to work are given a very small benefit - 750 zlotys per month, and for completely disabled citizens (including those from birth) the pension annuity is slightly higher - 900 zlotys.

The amount of payments is below the average for the economy, but the state is trying to socialize people with disabilities, stimulating the creation of jobs for specialists with special needs.

Against the general background, a military pension looks attractive:

• with regard to the age of retirement - the right to receive social benefits appears for men at 55 years old, and for women at 50 years old (subject to service for 15 years or more);
• in relation to the amount of rent - 75% of the military’s earnings;
• Regarding the assignment of a pension, both officers and privates can receive a military pension annuity.

Pension calculation rules

The formula on the basis of which pension annuity is assigned depends on several indicators:

Pension amount = Amount of paid insurance contributions (indexed to the date of payment) / Number of months of survival in retirement.

The necessary indices and demographic indicators are regularly provided by the Polish Statistical Service (GUS). They are calculated based on analysis of data for the previous 10 years.

It is interesting that in the event of the imminent death of a pensioner (within three years from the date of assignment of the pension), the right to receive part of the accumulated pension contributions passes to his heirs or dependents.

How is old age calculated?

So, let's summarize. To receive a minimum old-age pension of PLN 1,000 gross/PLN 853 net, you must:

• reach the age of 67 years;
• have 20 years of work experience for women, 25 for men.

For persons born before 1949 These are the only possible payments . The rest can count on an increase in benefits if they have more experience, received a high salary (and, accordingly, made large contributions to pension funds), and had personal merits to the state. In the latter case, the size of the pension can be set on an individual basis.

Quality of life of pensioners in Poland

Despite the relatively small pension benefits, most Polish pensioners do not live on the brink of poverty. The average pension is enough to eat well and pay for housing.

In addition, retirees who wish to continue working can find full-time or part-time employment.

Today, all restrictions in this regard have been lifted, and part-time work will not deprive a person of the right to receive a pension.

For a Pole who has reached retirement age, only positions with harmful or dangerous working conditions are unavailable; all other areas are quite suitable. For those who need additional funds, but cannot earn them on their own, the state will come to the rescue.

Free health insurance

All insured citizens in Poland have the right to free medical care. Compulsory insurance is provided to all working Polish citizens, with the result that children under 26 years of age and spouses who are not working are insured without any contributions. Even the unemployed do not pay any contributions. The right to free benefits is retained for insured persons and their family members if medical care is provided by a doctor who has entered into an agreement with the National Health Fund and is called a medical expert. The National Health Fund (NFZ) was created in 2004, replacing the previously 17 health insurance funds.

State support for Polish pensioners

European capitalism is structured in such a way that the weakly protected part of the population of many countries can always count on additional benefits from the state. Poland in this sense was no exception.

For pensioners and people who have lost their ability to work, a whole list of support measures is provided:

• assistance in paying utility bills and housing costs - from 50 to 100%;
• preferential rates for travel (within the country and within the EU);
• payment for retraining for disabled people who intend to change their field of employment;
• everyone who receives a pension benefit below the average level can purchase medicines at reduced prices (and pensioners over 75 years of age can receive medicines for free), enjoy free travel on public transport and can visit private clinics at reduced prices.

The insurance company collects all data

All data and insurance premiums are collected, processed and transmitted to the responsible authorities. Businesses and employers who contribute monthly to the total amount of social security contributions must calculate the contributions for employees and themselves. Employers pay 45 percent of their gross wages toward Social Security.

Social insurance covers pension insurance, disability insurance and accident insurance. Half of the pension insurance contributions are paid by the employer and the employee, while the accident insurance and unemployment fund contributions are paid only by the employer.

The right to receive a pension in Poland for citizens of CIS countries

The opportunity to receive a pension in Poland is provided not only for citizens of this country, but also for residents of the EU and several countries outside it, for example, for Ukrainians.

If foreigners want to claim insurance benefits from ZUS, they must:

• countries have concluded an intergovernmental agreement on social security;
• the pensioner legally lived and worked in Poland;
• the person has deregistered from the Pension Fund of his state (to avoid double payments);
• a citizen of another country could confirm his experience (in Poland, at home, or both).

Considering the large flow of labor migrants from the territory of the former USSR, interest in the issue of pensions among CIS citizens is quite high.

However, if the Ukrainian government managed in 2014 to agree on the recognition of work experience for its citizens, then a pension in Poland for Belarusians and Russians remains out of reach.

About who can qualify for pension payments and what is necessary for this when moving from the Russian Federation, see our article “Pensions for Russians living abroad: what you should know in 2019.”

Registration of a Polish pension for migrants from Ukraine

The social security agreement signed between Ukraine and Poland makes it possible for a pensioner to sum up the length of service earned over his entire working life.

Thus, a Ukrainian who has worked in his homeland for 15 years will have to earn only 10 years of experience in Poland in order for this to be enough for a retirement pension.

The Social Insurance Fund (ZUS) is tasked with administering payments when the time comes.

To confirm his right, a Ukrainian only needs to present to the local branch of the organization:

• application to ZUS;
• a foreign passport or other document that can confirm the identity and its right to stay in the country;
• certificate of deregistration with the Pension Fund of Ukraine;
• a note on cancellation of registration in Ukraine;
• documents on the amount of insurance experience, translated into Polish.

During the registration process, individual nuances may arise, which will require the provision of more specific papers.
The final list can only be obtained from a ZUS inspector. By the way, the decision to grant a foreigner a pension greater than the minimum also depends on the voivodeship in which the documents are submitted.

Pension for repatriates and those with a Pole Card

Poland has long approved programs under which it actively invites everyone who has Polish roots to return to the country for permanent residence or receive a Pole Card. In both cases, the holder of this status can count on unhindered entry into Poland, equal rights in doing business and financial support from the state: 900 zlotys for each family member for the first 9 months.

According to the law on repatriates, the experience earned in another country will be added to that accumulated in Poland.

Another thing is that even if a person has worked 25 or more years in his entire life, in Poland he will still be assigned a minimum pension of 1000 zlotys (gross).

How much do they charge? Minimum and average pension

Let us provide the indicators of the minimum and average benefits as of March 2020, when the next indexation took place, and the amount of the minimum wage (upon reaching the required age and having the minimum required length of service) was 1000 zlotys gross, i.e. 853 zlotys net, which is reflected in the table below.

Size in euros, dollars and zlotys

Conversion of zlotys to euros and dollars is carried out at the rate: 1 pln = 0.23 eur = 0.28 usd.

*The concept of maximum pension is not fixed in law and is provided for informational purposes only. Less than 5% of pensioners in the Republic of Poland can count on such payments.

The disability pension in its minimum value is now PLN 750 net.

It is expected that from March 1, 2020, the minimum pension will be increased by 2.4%.

Summarizing

The Polish pension system is recognized as one of the most effective in Europe. The indisputable achievement of the State Social Insurance Fund is that there is no shortage of funds to pay pensions in the country. This was made possible due to satisfactory economic trends and the activity of open pension funds in Poland.

However, the relaxations regarding the retirement age adopted from 2020 will sharply increase the number of people wishing to retire – up to 330 thousand people per year. According to the new government, there are enough funds in the budget and they are ready for a one-time jump in spending.

Where to apply for registration?

Even if there are interstate agreements, the pension is calculated only in one of the countries (at the place of residence). Accordingly, the other person must be deregistered.

In Poland, these issues are dealt with by the state social insurance agency - Zakład Ubezpieczeń Społecznych , but much more often you can find the abbreviation of this name - ZUS. It is there that you need to fill out the Wniosek o przyznanie emerytury i renty, all other necessary documents will be prompted by the staff of the institution.