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Success Stories Assistance Areas SEED Reports Contact Information Last updated: 39     Employee Pension Plans This legislation is shown for informational purposes only, and no liability for use for any other purpose is taken. Final version of the Act including the Senate’s amendments  Act of 22 August 1997 on employee pension programs   Chapter 1 General provisions   Article 1 The Law gives the rules for establishment and operation of employee pension programs, the conditions to be met by entities involved in their management, and the rules for concluding agreements which constitute the programs.   Article 2 The following definitions shall apply throughout the document: Employee - a person working under an employment contract, a contract of appointment, election, special appointment and cooperative contract of employment, on a full or part time basis; a person employed on the basis of an agency contract, or a contract for services if the person is entitled to social insurance benefits in relation to the employment; a person employed on the basis of a contract signed as a result of appointment or election in a body which represents a legal entity, including management contracts, Employer - an entity which employs employees as defined in section 1 of this article, Employment - signing of an employment contract or another contract described in 1) above as well as appointment, election and special appointment, Life insurance firm - a life insurance firm in the form of a joint stock company as defined by the Insurance Law of 28 July 1990 (DzU of 1996 No. 11/62, of 1997 No. 43/272, No. 88/554, No. 107/685 and No. 121/769 and 770), Mutual life insurer - a mutual life insurance firm as defined by the Insurance Law, Investment fund - an open or specialized open investment fund as defined by the Investment Fund Law of 28 August 1997 (DzU No 139/933) 6a) Group investment employee life insurance – a type of group 3 section I of the Insurance Act insurance, in recognition of Article 7a, Participant - a person who has entered an employee pension program, Funds - financial contributions in employee accounts maintained on the basis of a company pension agreement by life insurance firms, mutual life insurers, investment funds or employee pension funds, Employee representatives - a company trade union organization or representatives chosen in the way defined by Article 15.4 of the Act if no trade union operates in the company Disbursement - a payment to an employee of funds accumulated under the employee pension program in accordance with the terms described in the company pension agreement, Transfer disbursement - a transfer of funds accumulated by an employee participating in an employee pension program to another life insurance firm, a mutual life insurer, an investment fund, or an employee pension fund, accumulating funds via another employee pension program referred to in Article 28/1, Repayment - a withdrawal of funds accumulated by an employee participating in an employee pension program if there is no legal title for a disbursement or transfer disbursement, UN (Urzad Nadzoru) - Office for Pension Fund Supervision, Register - a register of “employee pension programs” maintained by UN. Remuneration – the participant’s revenue received from the employer engaged in running the employee pension program, which constitutes the basis for calculating pension and disability pension insurance contributions as per the Act of 13 October 1998 on the social insurance system (DzU No. 137/887 and No. 162/1118 and 1126, from 1999, No. 26/228, No. 60/636, No. 72/802, No. 78/875 and No. 110/1256 and from 2000 No. 9/118).   Article3 An employee pension program comprises company pension agreements, employee pension agreements, and, subject to section 2, agreements with life insurance firms or mutual life insurers, or with investment funds, or statutes of employee pension funds and, subject to Article 9/1, agreements on joint intercompany pension programs, which define the terms for accumulation of employee contributions which are to be disbursed upon retirement or on obtaining rights to disability benefits, which meet criteria set out by the Act. If the employer is an insurance company or a mutual life insurer, an employee pension company or an investment fund society, terms and conditions for accumulating funds referred to in section 1 are determined by the employee pension agreement. The regulation of section 2 shall not apply to entities, which do not manage all assets accumulated as part of the program.   Article 4 Employee pension programs may be offered under the terms of this Act by an employer or jointly by at least two employers who employ at least five employees each. The employers should be entered in appropriate registers no later than one year before the signing a company pension agreement. The requirement to be entered into the register does not apply to companies established as a result of ownership transformations of state enterprises. An employer which has been incessantly in business for at least 3 years may offer an employee pension program if it employs at least 3 employees. The self-employed, partners in partnership firms, general partnerships and those partners in limited partnerships who are fully liable may also participate in employee pension programs if they maintain pension programs for their employees which allow employer participation as well. Regulations of the Act, which relate to employees shall be appropriately applied to people who participate in employee pension programs, based on section 4.   Article5 In order to participate in an employee pension program employees must have been working for a given employer for at least 3 months, unless the company pension agreement states otherwise. Employees who have been employed within the territory of the Republic of Poland or within another territory may participate in employee pension programs if they have been seconded there by an employer whose domicile or place of residence are in the territory of Poland, irrespective of the employees’ citizenship or foreign exchange or tax law status. A person employed by more than one employer each of which maintains employee pension programs may participate in more than one pension program at the same time.   Article 6 A company pension agreement may not stipulate any other conditions for the participation of employees in the pension program than those defined in the Act. These conditions may not give rise to a situation whereby less than a half of all employees would have the right to participate in the employee pension program as at the date of filing the application for registering the program. (deleted)   Article 7 1. Employee pension programs may be maintained at the employer’s choice only in one of the following types of employee pension insurance: 1/ an employee pension fund, 2/ an agreement on contributing employee contributions to an investment fund, 3/ a group employee life insurance agreement concluded with a life insurance firm, 4/ an agreement on contributing employee contributions in respect of employees who are going to become members of mutual life insurers being a party to that agreement. 1a. Agreements referred to in section 1.2 may also be concluded by the employer with different investment funds managed by the same investment fund society. 2. Agreements referred to in section 1.3 and 1.4 may only be signed for investment-linked life assurance and additionally, on a voluntary basis, with sickness and accident insurance if they complement group investment linked life assurance. 3. Forming employee pension funds and pension societies, setting their statutes and registration shall be carried out under the Law of 28 August 1997 on establishment and operation of pension funds (DzU No. 139/934).   Article 7a. Regulations of sections 2-17 shall apply to operation of insurance firms and mutual life insurers in respect of group investment linked employee life insurance agreements concluded by them as part of the employee pension program Agreements referred to in Article 7.2 should define the portion of the contribution which: 1) turns into funds, 2) is appropriated to insurance cover, 3) covers costs of the insurance firm or mutual life insurer. The insurance firm and the mutual life insurer are obliged to make valuations of the funds’ assets as part of the employee pension program and to publish the results of those valuations at least on a monthly basis in a nation-wide newspaper, together with data allowing participants of the program determine the respective portion of the fund’s assets. The insurance firm and the mutual life insurer are obliged to publish in a nation-wide newspaper annual and semi-annual detailed information on funds established in connection with group investment-linked employee life insurance agreements concluded as part of employee pension programs. Annual and semi-annual information should also be forwarded to the participant on demand. The detailed scope of information referred to in section 4 shall be determined by the minister responsible for financial institutions by virtue of a decree. Insurance firms and mutual life insurers invest assets covering funds set up in connection with group investment-linked employee life insurance agreements concluded as part of employee pension only in: 1) bonds, bills and other securities issued by the State treasury or the National Bank of Poland, as well as loans and bank loans extended to these entities, 2) bonds and other debt securities relating to cash benefits, guaranteed or warranted by the State Treasury or the National Bank of Poland, as well as deposits, loans and bank loans guaranteed or warranted by these entities, 3) bank deposits and securities, 4) shares of companies quoted on the regulated stock market, 5) shares of companies quoted on the regulated over-the-counter market or of companies not quoted on the regulated stock market or regulated over-the-counter market but admitted for public trading, 6) shares of National Investment Funds, 7) investment certificates issued by closed-ended investment funds or mixed investment funds, 8) participation units sold by open-ended investment funds and specialised open-ended investment funds, 9) bonds and other debt securities issued by local authorities, their associations or the municipality of Warsaw, which have been admitted for public trading, 10) bonds and other debt securities issued by local authorities, their associations or the municipality of Warsaw, which have not been admitted for public trading, 11) totally secured bonds issued by entities other than local authorities, their associations or the municipality of Warsaw, which have been admitted for public trading, 12) totally secured bonds issued by entities other than local authorities, their associations or the municipality of Warsaw, which have not been admitted for public trading, 13) bonds and other debt securities issued by public companies other than the securities referred to in items 11 and 12, 14) mortgage bonds, 15) other investments which may be determined by the Council of Ministers by virtue of a decree. Based on the general permit given by the minister responsible for financial institutions, by virtue of a decree and on terms determined in the permit, assets comprising funds set up in connection with group investment-linked employee life insurance agreements concluded as part of employee pension programs may be invested outside the territory of Poland in securities issued by public companies of OECD member states or other foreign states, which will be defined in the permit, as well as in treasury securities issued by governments or central banks of these countries, and participation titles issued by joint investment institutions with their registered offices in these countries, if the institutions offer public participation titles and redeem them on the participant’s order. In respect of investments referred to in section 7, the limit determined on the basis of Article 63/4 of the Insurance Act shall be applied. Insurance firms and mutual life insurers cannot invest more than 5% of the value of assets constituting funds created in connection with group investment-linked employee life insurance agreements concluded as part of employee pension programs in securities issued by one entity and in that entity’s receivables. An insurance firm and a mutual life insurer may invest up to 10% of the value of assets comprising funds created in connection with group investment-linked employee life insurance agreements concluded as part of employee pension programs in securities issued by one entity and receivables of that entity, if the total value of such investments does not exceed 40% of the value of the fund. An insurance firm and a mutual life insurer may invest up to 100% of the value of assets comprising funds for accumulating employee pension program finance in investments defined in section 6.8. The limits of sections 9 and 10 do not apply to these investments. The limits referred to in section 10 do not apply to investments in securities issued or guaranteed by the State Treasury or the National Bank of Poland and to investments in securities issued or guaranteed by OECD states and international financial institutions, of which the Republic of Poland or at least two OECD states are member, in recognition of section 8. Investments referred to in section 6 in securities of one issuer or guaranteed by one entity may not exceed 35% of the value of the fund, unless the insurance contract terms allow otherwise and indicate the issuer or guarantor. If the employee pension program is being realised based on insurance contract providing for investment of 100% of funds in the fund’s participation units, in case of bankruptcy of the insurance firm or mutual life insurer, these participation units are not included in the estate in bankruptcy, and funds accumulated using this investment (if no transfer payment is made) are paid out to participants of the pension program. Participation units cannot be subject to composition arrangement with the insurance firm or mutual life insurer, or to executive proceedings with respect to the insurance firm or mutual life insurer. If the life insurance, or accident or sickness risk cover contribution is not paid, it may not be deducted from funds accumulated in funds set-up in connection with group investment-linked employee life insurance agreements concluded as part of employee pension programs. If 100% of funds referred to in section 6 is to be invested in participation units of investment funds, the agreement with the insurance firm or mutual life insurer and the company pension agreement should define the investment fund or funds whose participation units are to be purchased as part of the agreement, as well as procedures for changing the investment fund. Offering the product defined in Article 7.1.3 and 4, an insurance firm or a mutual life insurer shall be obliged to use the term "group investment-linked life insurance".   Article 8 The terms: "pension program", "pension plan", and "pension agreement", also preceded by the words "employee" or "company", may only be used in relation to programs, plans and agreements governed by the Act.   Chapter 2 Intercompany pension programs   Article 9 For the purpose of a joint offer of a pension program to employees, employers may sign joint intercompany pension program agreements determining the form of employee pension insurance and the terms offered in the company pension agreement. Provisions of Article 10.2 and Article 14.3, sentence two, apply to joint intercompany pension programs. Employers may agree that in the event of insolvency or winding up, sale, demerger or merger related to any one of them, the other employers will maintain the pension program for employees of the company who had participated in the program to date, if the new employer agrees to enter the program. Employers are obliged in the event of occurrences stated in 3 above, to secure the servicing and management of funds accumulated in the accounts of employees participating in the program to date, up to the date of their disbursement, transfer disbursement or repayment.   Article 10 Employers bound by a joint inter-company pension program agreement may, at the request of another employer who accepts the terms of the agreement and program, agree to his signing the agreement and inclusion in the program if the employer accepts the program terms according to appropriate procedures. The access of an employer to an inter-company pension program does not relieve him of the obligation to conclude a company pension agreement. In case of accessing a registered agreement on joint intercompany pension program in the form of an amployee pension fund, the company pension agreement indicates an existing employee pension fund.   Article 11 An employee pension program may stipulate the parallel maintenance of various forms of retirement insurance described in Article 7 in cases where the employer acquires a company or an organized part thereof (plant) together with the liabilities relating to the company pension agreement, agreements with investment funds, life insurance firms or mutual life insurers, or the acquisition of shares in an employee pension society, or if employers maintaining employee pension programs decide to merge. Within three years from the date of acquisition or merger in situations described in section 1 the employer should ensure the amendment of company pension agreements and agreements signed with investment funds, mutual life insurers or life insurance companies or the merger of pension societies or the take-over of a pension fund by one of the mutual life insurers and the liquidation of the other so as to offer all employees one form of employee pension program.   Chapter 3 Formation of employee pension programs   Article 12 A company pension agreement is an agreement signed by the employer and employee representative.   Article 13 An employee pension agreement is an agreement signed by virtue of voluntary access of an employee to an employee pension program.   Article 14 The employer presents to the employee representatives a draft of the company pension agreement including a chosen form of the program described in Article 7.1 and setting out the draft terms agreed with an investment fund, a life insurance firm, a mutual life insurer, or a draft statute of the society and statute of the employee pension fund. A company pension agreement shall determine: the form of the program, including naming a specific investment fund or funds, life insurance firm or a mutual life insurer, or an employee pension fund which will accumulate funds and manage them on the basis of an agreement concluded with the employer, conditions and procedures for entering and exiting the program, base contribution amount, minimum permissible additional monthly contribution, dates and methods of declaring additional contributions by participants, as well as dates of calculating and deducting the contributions by the employer in order to transfer them to participants’ accounts, dates and methods of calculating and transfer of base contributions to participants’ accounts, conditions for accumulation and managing funds by the life insurance firm or mutual life insurer, an investment fund or an employee pension fund with which the employer has signed an agreement, and specifically costs and fees charged to the employee and employer, the conditions for amending and terminating the company or employee pension agreement, cases and conditions for terminating the agreement with the entity managing the funds, conditions, methods, dates costs and fees as well as consequences to the participant’s rights resulting from disbursement, transfer disbursement, transfer of funds between investment funds or repayment. a model pension plan, cases and conditions of changing the form of an employee pension program or the entity responsible for managing the funds. 3. If a company pension agreement determines the realization of the program in the form of an employee pension fund it should also state the conditions for creating an employee pension society to manage the fund and the terms and conditions described in the Act on the organization and operation of pension funds. An employee pension agreement which determines that the program be realised in the form of an employee pension fund should be attached to the application for the licence to create an employee pension fund referred to in the Act on organisation and operation of pension funds, and in the case referred to in Article 10.3, it should be attached to the application for issuing a licence to take up or acquire shares in an employee pension society. 4. If a company pension agreement determines the realization of the program in the form of accumulation of funds in an investment fund it should also determine the rules for making payments by employees to the fund in respect of selling and purchasing units, referred to in the Investment Fund Act. 4a In cases and on terms and conditions defined in the company pension agreement a participant is entitled to change funds by transferring funds to another investment fund comprising a part of the same employee pension program. The transfer is done through a transfer disbursement. 5. Only the employer may market employee pension programs and particular forms of pension insurance on the company premises.   Article 15 A company pension agreement shall be signed by the employer and the employee representatives. In a company where one trade union operates, the employer concludes an agreement with that union, more than one trade union operates the employer signs a joint agreement with all of them. If the agreement is not signed within 6 months of presenting the proposal of the program to the trade union due to inability to agree on its contents by the parties, provisions of section 4 apply, If there is no trade union in the company, employee representatives are chosen by a general meeting of employees on terms defined by them. The employer calls the meeting in a way traditionally accepted by the company no later than 7 days before it is due to be held. Resolutions made in the course of the meeting are valid irrespective of the number of people present on the condition that it was summoned in an appropriate manner. Disputes arising between parties to company pension agreements shall be resolved by general courts.   Article 15a. An agreement with an entity managing the funds should determine specifically: 1) terms and conditions for accumulating and managing funds, including costs and fees charged to the employer and participant, 2) cases and terms of terminating the agreement, 3) terms and conditions of making disbursements, repayments and transfer disbursements.   Article 16 Employee pension agreements are prepared in writing and the contents include the following stipulations of the employee pension program: 1) identification of parties to the agreement, 2) information compliant with the statement referred to in Article 17, 3) the pension plan. 2. The pension plan defines: 1) the form of an employee pension program indicating the investment, insurance firm, mutual life insurer or an employee pension fund, which will accumulate funds and manage them based on an agreement with the employer, 2) the amount of base contribution, and the minimum acceptable additional monthly contribution and the method of its declaration 4) conditions, depending on the form of the program for: a) an agreement signed with an insurance firm or a mutual life insurer, b) an agreement concluded with an investment fund, c) the statute of an employee pension fund, 5) terms of disbursement, transfer disbursement and repayment of funds accumulated on a participant’s account, giving the anticipated disbursement schedule according to expected future conditions, period needed for accumulation of funds, rate of return, and contribution level, as well as risk associated with participation in the program, 6) terms for amending or terminating the employee pension agreement, and its consequences, including financial consequences, 7) information indicating: a) beneficiaries’ or inheritors’ rights in the event of employee’s death, b) cases and consequences of the liquidation of a program, c) the possibility of transferring the rights to accumulated funds, d) tax effects of contributions. 3. The employer shall be obliged to inform participants of changes to the legal status within the scope referred to in section 2.7.   Article 17 1. To enter an employee pension program an employee or a person mentioned in Article 4.4 shall make a statement to the employer on participation in the program. 2. A statement of participation of an employee in the program should include: 1) the amount of the declared additional contribution, authorization for the employer to calculate it, deduct appropriate amounts from remuneration and transfer them to the employee account maintained by the entity which manages the funds, 2) an employee’s statement that he has acquainted himself with the terms of the employee pension agreement and with the voluntary character of access to the program on these terms, 3) the potential arrangements in the event of the employee’s death. 4) a statement by the employee to the effect that he did not lose entitlement to participate in employee pension programs to the date of submitting the statement. 3. The employer is obliged to accept the statement if the person submitting it complies with the terms of the program or return the statement with a justification within one month of its submission if there are reasons (defined by the Act or by the company pension agreement) for not signing the employee pension agreement. 4. The agreement is concluded on reaching the deadline for returning the statement and the employer is obliged from that moment on to release a signed agreement to the participant. 5. Disputes relating to the signing of agreements and claims relating to legal relationships between participants of employee pension programs and employers shall be settled by general courts appropriate to the participant’s domicile.   Article 18 1. A company pension agreement may stipulate voluntary contribution of employer’s shares by the participant to the employee pension fund. 2. The ban on sale of shares included in the regulations on commercialization and privatization of state enterprises shall not apply to shares acquired from the State Treasury, to be contributed in accordance with section 1. 3. An employee pension agreement should include conditions for contributing shares to the account with a fund, the terms for maintenance of those accounts. The participant shall state (in the statement referred to in this article) the number of employer’s shares he will contribute to his account at the amount consistent with the company pension agreement.   Article 19 1. An employee shall, through the employer, make a statement of intent in respect of matters covered by the employee pension program related to insurance, participation in an investment fund or in an employee pension fund, for a life insurance firm, a mutual life insurer, an investment fund or an employee pension fund. The provisions of section 1 above shall apply on termination of employment unless management of an employee pension fund has been transferred to another employee pension society, there has been a merger or demerger of societies, and the employer is not a shareholder but the shareholder who is going to take over the responsibilities of the existing employer has been determined. In the case of a merger, demerger, sale of a company or its organized part and the employer change involved, the participant in an employee pension program makes a statement of intent through the new employer. In cases relating to an employee pension program an employer may not be the plenipotentiary of the participant.   Article 20 A joint intercompany pension program, a company pension agreement, employee pension agreements, agreements with life insurance firms and mutual life insurers, and agreements with investment funds become valid no earlier than upon the registration of the program by UN. Amendments to a company pension agreement shall be governed by Article15. Amendments to the company pension agreement which could cause an increase in the financial liability of the participants or would worsen the terms relating to transferring funds by the participants may come into force no earlier than after they have been registered and five months after written notifications about the amendment have been sent out to participants.   Article 21 A person who, although still a participant of an employee pension program, no longer qualifies, or ceases to be employed with the employer who maintains the pension program does not have to withdraw his funds until the time of their disbursement or transfer on his entering another pension program.   Article 22 The basic contribution is financed by the employer, and the additional contribution – by the participant. The amount of base contribution is determined as a percentage share of the participant’s salary. An employee may elect to make an additional contribution. The amount of the additional contribution is determined on a lump-sum or percentage of remuneration basis. Base contribution cannot exceed 7% of the participant’s remuneration. The amount of the base contribution is determined in the company pension agreement, and the amount of the additional contribution – by the employee, in his declaration of participation in an employee pension program. Base contribution is not included in remuneration constituting the basis for determining compulsory social insurance contributions. A participant may change the amount of his additional contribution (which will have effects in the future) by changing the statement of participation in an employee pension program. An employer has to: 1) calculate and deduct base contributions, 2) calculate, deduct and transfer additional contributions. Contributions are transferred to individual accounts of the participants maintained by the entity which manages the funds. Additional contributions are deducted from an employee’s remuneration received from the employer who runs the employee pension program, after taxation. Additional contributions for a given month are deducted from that month’s remuneration, unless the company pension agreement states otherwise. The employer calculates and deducts contributions: 1) in respect of components of remuneration payable for periods not longer than one month – at the dates of payment of these remuneration components binding the employer, and transfers them monthly, 2) in respect of components payable in periods longer than one month – at the dates of payment of these components, and transfers them also on these dates.   Article 23 (deleted)   Article 24 (deleted)   Article 25 The employer, insofar as signing employee pension agreements, agreements with investment funds, life insurance firms or mutual life insurers, or employee pension funds is concerned, acts in its own name and on behalf of: insurers, employee pension funds, employees or investment funds, respectively. The employer shall be liable to the participants for the failure to carry out or improper carrying out of duties following from the company pension agreement and for timeliness and correctness of calculation, deduction and transfer of contributions to employee accounts.   Chapter 4 Rules for disbursements and liquidation of employee pension programs   Article 26 1. Disbursement of funds accumulated under the employee pension program is made only in the following circumstances: at the request of a participant after attaining the age of 60 or upon obtaining early retirement rights, or in the case of an appropriate body issuing a certificate on gaining rights to disability benefits due to the inability to continue work; if the participant does not request the disbursement of funds before he is 70 years old, once he attains that age, in case of the liquidation of an employee society or pension fund unless transfer disbursements are made or the society is taken over by another pension society; in the case of liquidation of an employee pension fund unless a transfer disbursement or a transfer of funds to another fund managed by the same society is made, in the case of liquidation of a life insurance firm or mutual life insurer unless a transfer disbursement is made or rights relating to the agreement signed by the employer and the insurer are ceded on behalf of another life insurance firm or mutual life insurer. in the case of a participant’s death - to his beneficiaries or inheritors named in the insurance agreement. 2. Depending on the request of the participant payments may be made on a one-off basis or in installments, in cash or transferred to an indicated account, including an account with a life insurance firm or a mutual life insurer, on the condition that it is not maintained as part of an employee pension program. One-off disbursements must be made within three months of requesting them. In the case of installment disbursements the first installment is payable within a month of requesting it unless the participant asks for a later disbursement. 3. Unsolicited disbursement is made upon the participant’s attaining the age of 70 years, on a one-off basis, within 3 months of that date. 4. A disbursement results in the forfeiture of rights of participation in employee pension programs in the future except for the situation described in section 1.3-5. 5. A disbursement cannot be made in a situation described in Article 5.3 if, once it was made, the employee remained a participant of another pension program. In such a case only a transfer disbursement can be made.   Article 27 The statute of an employee pension fund, an agreement with an investment fund, or an agreement with a life insurance firm or a mutual life insurer should determine, in compliance with the provisions of a company pension agreement, dates and conditions for installment disbursements, ensuring the option of termination and a one-off disbursement within 3 months and a cession of rights to third parties accompanied by a possibility of their simultaneous blocking for a pre-defined period. In the scope not regulated by the Act, calculation and disbursement of funds accumulated on an employee pension fund account are regulated by the Act on organization and operation of pension funds, of funds accumulated on accounts with investment funds - the Act on investment funds and of funds accumulated in life insurance firm or mutual life insurer accounts - the Insurance Act. Detailed rules are set out in the appropriate statutes, general terms of insurance, or by-laws. Disbursements made under the Act are not subject to limits stipulated by the Foreign Exchange Act of 2 December 1994 (DzU No. 160/1063 and from 1999, no. 83/931) in respect of transfer of foreign currency abroad and sale of foreign exchange to foreign persons by banks.   Article 28 A transfer disbursement is made to another life insurance firm, mutual life insurer, investment fund or an employee pension fund on the basis of an employee request when participation in the previous program ceases and upon entering a new program as a result of a change of employer, withdrawal from the old program or the liquidation of an employee pension program, or a change in the form of the employee pension program or in the entity which manages the funds. An company pension agreement should include dates and conditions for accepting new participants who intend to transfer their funds and participate in the employee pension program after they change employers if they comply with the terms and conditions of the agreement. Agreements signed with a life insurance firm or a mutual life insurer, investment fund agreements, and statutes of employee pension funds should determine the dates and conditions and ensure receipt of transfer disbursements and acceptance of participants who intend to continue participation in an employee pension program.   Article 29 The repayment of funds accumulated in a program is made in case of the termination of an agreement by a participant due to liquidation of the program in cases defined in Article 34.1.4 unless there is justification for their disbursement or making a transfer disbursement. The entity which manages the funds ensures their repayment within the notice period in the manner requested by the employee expressed in his notice. (deleted)   Article 30 Disbursement, transfer disbursement or repayment of funds accumulated in an investment fund in the realization of an employee pension program is made in a monetary form upon redeeming units held in a participant’s account by the fund.   Article 31 A participant may at any time terminate an employee pension agreement in writing by giving notice to the employer; the period of notice stipulated by the company agreement cannot be shorter than 1 month and longer than 3 months. In the case of the termination of the agreement funds accumulated in the employee’s account to date are left in the account to the date of their disbursement in compliance with the stipulations of the company pension agreement, except for a transfer disbursement to another employee pension program at a participant’s request. (deleted) (deleted)   Article 32 In his statement, a participant of an employee pension program may dispose of funds accumulated in his account as part of the employee pension program by indicating a beneficiary who will collect the funds in the event of his death. The instruction may be changed or cancelled at any time. If the participant does not state what to do with his funds in the event of his death, his inheritors benefit under general regulations in force. A disbursement them should be made within 1 month of the date of submitting a certificate of their coming into inheritance, and the inheritors have to indicate a person authorized to receive the disbursement.   Article 33 Funds accumulated as part of the employee pension program from basic contributions are not subject to court or administration execution unless the obligation to repay or disburse them arose; in that case they are subject to execution proceedings from the date they mature. These restrictions do not relate to execution proceedings for the purpose of satisfying claims in relation to alimony payments.   Article 34 1. An employee pension program may be liquidated in the event of: the winding up or insolvency of the employer, the winding up or insolvency of a life insurance firm or a mutual life insurer the liquidation of all investment funds in which contributions were accumulated as part of an employee pension program, liquidation of an employee pension fund, a diminution in value of funds contributed as part of the program below the level stipulated by the agreement with the life insurance firm or mutual life insurer, investment fund or the statute of the pension fund, deletion of the program from the register. 1a. If the agreements referred to in Article 7.1.2 have been concluded by the employer with different investment funds managed by the same investment fund society, the employee pension fund may only be liquidated upon the liquidation of all those funds. 2. Agreements with entities which manage funds should ensure, in the event of the liquidation of a program, the maintenance of funds in participants’ accounts until they are disbursed, subject to a transfer disbursement or repaid. 3. In the case described in section 1.2-3a, an employer is obliged to ensure that a new agreement with a new society, life insurance firm, or an investment fund is signed or that contributions are sent to another existing employee pension fund and to suggest necessary amendments to the company pension agreement. 3a The regulation of section 3 applies accordingly to cases referred to in section 1a. 3b If the agreements referred to in Article 7.1.2 have been concluded by the employer with different investment funds managed by the same investment fund society, in case of liquidation of one of the funds the employer is obliged to ensure conclusion of an agreement on contribution transfers to another of these funds. 4. A decision on the liquidation of an employee pension program is sent out by the employer to the participants giving the date from which contributions will not be calculated and deducted and the reasons for the liquidation indicating actions which had been taken by him in accordance with the provisions of this Act and the Act on organization and operation of pension funds.   Chapter 5 Registration of employee pension funds   Article 35 In order for an employee pension program to be established the following actions are required: conclusion of a company pension agreement, conclusion of an agreement with an investment fund, a life insurance firm or a mutual life insurer, or establishment of a pension society and an employee pension fund, in recognition of Article 10.3, and making an entry in the register maintained by UN. An employer’s request to enter an employee pension program in the register should be filed immediately and should include the employer’s data: name, domicile, REGON number, mail address, and source documents confirming those data as well as the following enclosures: the agreement with an insurer, the agreement with an investment fund or a statute of the employee fund, the joint inter-company pension program agreement, the company pension agreement, a pro forma employee pension agreement, information on employment, authorizations of employee representatives to conclude the agreement and a certificate of timely payment of social security contributions and lack of default tax payments.   Article 36 1. An entry of an employee pension program in the register should contain the following: the employer’s data included in the application, a note stating whether the program is a joint one or not, the form of the pension program and the details of the life insurance firm, the mutual life insurer, the investment fund or the employee pension fund, which is going to manage the accumulated funds, program participation conditions included in the company pension agreement. 2. The employer has the obligation to notify about any changes to those data within two weeks of their occurrence. 3. A change in an employee pension agreement may come into force effective from the date of registering the changes referred to in section 2 by UN, at the earliest.   Article 37 1. UN has the obligation to review the application for entering a given program into the register within a month of the submission. 2. If the application does not meet conditions stipulated by this Act, UN has the obligation to urge the employer within a month to eliminate irregularities, and to indicate a period for that elimination no shorter than three weeks.   Article 38 UN may refuse to register an employee pension program only in circumstances referred to in Article 37.2   Article 39 1. UN supervises employee pension programs with regard to their compliance with the law. 2. In particular, UN has the right to request any data, documents and explanations related to managing the program from the employer who manages a given employee pension program. 3. If any irregularities in the management of a given program are noted UN notifies the person who manages the program about them and sets the deadline for their elimination. 4. If the irregularities have not been eliminated by that deadline UN may impose a fine of up to Zl 500,000 on the employer who manages the program. 5. In cases not regulated by this Act UN’s responsibilities are regulated by the Act on organization and operation of pension funds.   Article 40 1. UN proceedings are governed by the Administrative Procedure Code. Registration, refusal to register a program or amendments thereto, or removal of a program from a register are effected by virtue of an administrative decision. 2 The minister responsible for social insurance shall stipulate, by means of a decree, detailed rules for maintenance of pension programs as well as deadlines for and the manner of issuing copies of register entry certificates. 3. The minister responsible for social insurance will determine, by virtue of a decree, rules for preparing simulation disbursement schedules, referred to in Article 16.2.5.   Chapter 6 Penal regulations   Article 41 Any entity which without authorization uses the terms specified in Article 8 of this Act as part of its name, or to describe its business activities, or for advertising purposes, shall be subject to a fine up to Zl 1,000,000 or to imprisonment for a period no longer than five years. Anyone who on behalf of a legal entity acts in the way described in Article41.1. shall be subject to the same penalty.   Chapter 7 Changes to existing regulations, interim and final provisions   Article 42 With regard to the Inheritance and Donation Tax Act of 28 July 1983 (DzU of 1997 No. 16/89 and 137/926), Article 1.2 the period is replaced with a comma and the following words are added "as well as acquiring uninherited rights to funds accumulated in an employee pension fund, an open investment fund or a specialized open investment fund - as a result of the realization of an employee pension program, pursuant to an instruction given by a participant of that program in the event of his death."   Article 43 With regard to the Personal Income Tax Act of 26 July 1991 (DzU of 1993 No. 90/416, 134/646, of 1994 No. 43/163, 90/419, 113/547, 123/602, 126/626, of 1995 No. 5/25, 133/654, of 1996 No. 25/113, 87/395, 137/638, 147/686, 156/776, of 1997 No. 28/153, 30/164, 71/449, 85/538, No. 96/592, No. 121/770, No. 123/776 and No. 137/926) the following are amended: 1) Article 14.2(8): the period is replaced by a comma and the following subsection (9) is added: "9) remuneration received for management of an employee pension program of a participant, in relation to repayment of funds from additional contributions."; 2) Article 22: after section 1a the following section 1b is added: "1b. Expenditure incurred by an employer on ensuring proper realization of an employee pension program as defined by regulations concerning employee pension programs shall also be considered tax deductible costs."   Article 44 With regard to the Corporate Income Tax Act of 15 February 1992 (DzU of 1993 No. 106/482, 134/646, of 1994 No. 1/2, 43/163, 80/368, 87/406, 90/419, 113/547, 123/602, 127/627, of 1995 No. 5/25, 86/433, 96/478, 133/654, 142/704, of 1996 No. 25/113, 34/146, 90/405, 137/639, 147/686, of 1997 No. 9/44, 28/153, 79/484, No. 96/592, No. 107/685, No. 118/754, No.121/770, No. 123/776 and 777, No. 137/926) subsection 1d is added after subsection 1c in Article 15: "1d. Expenditure incurred by an employer on ensuring proper realization of an employee pension program as defined by regulations concerning employee pension programs shall also be considered tax deductible costs."   Article 45 1. (deleted) 2. (deleted) 3. The employer’s actions in respect of concluding and realization of a company pension agreement, collection of contributions, repayment and disbursement of funds shall not constitute insurance agency activities as understood by the Insurance Act.   Article 45a If the employer and the employee representatives intend to set up the employee pension program in the form of an employee pension fund, the company pension agreement may be concluded from 1 January 1999; this also relates to a joint intercompany pension program agreement.   Article 45b. Employees who run group employee investment-linked life insurance or any other form of group accumulation of funds for pension purposes, and who, based on different regulations, are entitled to deduct expenses incurred from the basis of social insurance contribution, may adapt existing agreements to the terms of the Act and form an employee pension program. In the case described in section 1, the employee may decide whether to continue accumulating funds as part of the employee pension program. In the case described in section 2: 1) other funds accumulated before the employee enters the employee pension program are treated as funds from basic contribution as per this Act and shall not be included in the calculation of basic social insurance contribution, 2) an employee shall not be obliged to repay the amounts deducted for social insurance.   Article 45c. 1. Regulations of Article 45b shall apply respectively if the employer and the employee representatives resign from group investment-linked life insurance or another form of group accumulation of funds for pension purposes and change the form of the current pension program. 2. In the case referred to in section 1, an insurance firm, a mutual life insurer or an investment fund are obliged, based on an employee’s instruction, to transfer the funds to his account maintained as part of the employee pension program.    Article 46 The Act shall come into force on 1 April 1999, with the exception of: 1) Article 45a, which comes into force on 1 January 1999, 2) Article 3-6, Article 7.1.1 and 7.3, Article 9-11, 13, 14.1-3 and 5, Article 15, 18, 27, 28 and 34 in the scope relating to employee pension programs in the form of employee pension funds, which come into force on 1 January 1999.

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