1. THE IMPACT OF TRADE UNIONS ON OCCUPATIONAL PENSION SCHEMES IN POLAND IV INTERNATIONAL SCIENTIFIC CONFERENCE SOCIAL SECURITY SYSTEMS IN THE LIGHT OF DEMOGRAPHIC, ECONOMIC AND TECHNOLOGICAL CHALLENGES legal advisor Marcin Wojewódka, Ph.D. Poznań, 25 th September 2015

2. 2 III PILLAR OCCUPATIONAL PENSION SCHEMES (EPS) INDIVIDUAL PRODUCTS (IKE, IKZE) SOCIAL SECURITY FUND OPEN PENSION FUND MANDATORY PILLARS VOLUNTARY PILLARS II PILLAR PENSION SYSTEM IN POLAND 2015 I PILLAR

3. 3 OCCUPATIONAL PENSION SCHEME – MAIN CHARACTERSITICS  DC vehicle organized by an employer for its employees  Can be set up in one of forms provided by law (insurance, investment fund, employee pension fund, foreign investment)  Mandatory employer contribution (up to 7% of salary) and voluntary employee contribution  Mandatory registration of plan by pension fund supervisory office  Tax and social security incentives  Rules of scheme precisely defined by law provisions  Mandatory cooperation of employer with employee representatives

4. 4 PARTIES OF OCCUPATIONAL PENSION SCHEME Company pension agreement Agreement with provider

5. 5 POSSIBLE FORMS OF EMPLOYEE REPRESENTATION DUE TO THE EXISTENCE OF TRADE UNIONS WITHIN THE EMPLOYER EMPLOYEE REPRESENTATION

6. 6 STATISTICS OF OCCUPATIONAL PENSION SCHEMES IN POLAND AS OF 31 December 2014 NUMBER OF SCHEMES As of 31st December 2014 there were only 1064 occupational pension plans in Poland registered 2014 2000 2007 1064 year Number of plans Source: KNF raport „Pracownicze Programy Emerytalne 2014” Warszawa, 2015, page 10

7. 7 STATISTICS OF OCCUPATIONAL PENSION SCHEMES IN POLAND AS OF 31 December 2014 ASSETS UNDER MANAGEMENT As of 31st December 2014 there were only 10,3 billion złoty as assets under all occupational pension plans (2,5 billion EURO) 10,3 bilion zloty year Millions of zloty Source: KNF raport „Pracownicze Programy Emerytalne 2014” Warszawa, 2015, page 15

8. 8 STATISTICS OF OCCUPATIONAL PENSION SCHEMES IN POLAND AS OF 31 December 2014 NUMBER OF PARTICIPANTS As of 31st December 2014 there were 381 000 participants in all occupational pension plans in Poland registered what constitutes 2,38% of employees population in Poland 2014 2000 2007 381 000 year Number of participants Source: KNF raport „Pracownicze Programy Emerytalne 2014” Warszawa, 2015, page 10

9. 9 LIFE CYCLE OF OCCUPATIONAL PENSION SCHEME IN POLAND LIFE CYCLE OF PENSION SCHEME

10. 10 INITIATION OF OCCUPATIONAL PENSION SCHEME  The employer is obliged to present the employee representation proposal of occupational pension scheme containing: a draft of the company pension scheme agreement the terms and conditions of a preliminary agreement with a financial institution (provider)

11. 11 INITIATION OF OCCUPATIONAL PENSION SCHEME  The employees representation can express their opinion not only by confirmation the draft of the company pension scheme agreement but also by negotiating general provisions of occupational pension scheme, the terms and conditions of company pension scheme agreement  If the employee representation refuses to conclude a company pension scheme agreement in general, then the employer’s efforts will be unavailing

12. 12 MODIFICATIONS OF AN OCCUPATIONAL PENSION SCHEME  Modification of a company pension scheme agreement and/or an agreement with financial institution are prerequisites for changes in the official register. Every adjustment, change or annex to the agreements oblige the employer to negotiate new ideas and provisions with the employee representation. If the employees’ party is not willing to cooperate and settle the agreement for changes, the employer cannot act unilaterally  The above mentioned agreement comes into force solely after proper registration by the Polish Financial Supervision Authority

13. 13 MODIFICATIONS OF AN OCCUPATIONAL PENSION SCHEME  Without approval of the employee representation, the employer (unilaterally) is entitled exclusively to: suspend the allotting of basic contributions, temporarily reduce the basic contribution (3-6 months)  If the employee’s party initiates changes (e.g. augmentation of the basic contribution), the employer is not obliged to negotiate and accept the offer

14. 14 LIQUIDATION OF AN OCCUPATIONAL PENSION SCHEME  Liquidation of the occupational pension scheme may be inevitable to optimize costs and keep the company functioning.  Initiation of liquidation of the scheme is possible at any time. The employer is entitled to begin the process unilaterally, without the approval of employee representation.  There are to ways of liquidation:  with employee representation consent  without employee representation consent

15. 15 LIQUIDATION OF AN OCCUPATIONAL PENSION SCHEME  In case of employee representation consent to liquidation of occupational pension scheme parties conclude relevant agreement and employer is entitled to close the scheme with 3 months period  In case of lack of employee representation consent to liquidation of occupational pension scheme employer has to start a liquidation procedure that implies  Suspension of payment of basic premium for at least 3 month period  Termination with 12 month notice period

16. 16 IMPACT OF EMPLOYEE REPRESENTATION ON PENSION SCHEME LIFE CYCLE OF PENSION SCHEME CRUCIAL AUXILIARY

17. 17 CONCLUSIONS As the provisions of Polish law provide employee representation with strong power to legally influence on the existence and functioning of occupational pension scheme trade unions might be one of the drivers of further development of occupational schemes in Poland

18. Thank you for your attention Ph.D. Marcin Wojewódka marcin.wojewodka@wojewodka.pl

19. 19 SETTING UP OCCUPATIONAL PENSION SCHEME IN 6 STEPS SETTING UP STEPS