It’s inevitable that one day we’ll become viable for some kind of pension. So, it would be a good idea to take care of that in a proper manner. One of the most popular choices for Polish residents in this regard is to simply live off of the basic pension plan. However, there are other solution that can be considered perfectly viable for the right person. Of course, not everything is sure, and therefore we cannot be certain if we actually receive the money when we become available for a pension scheme, but it’s worth at least considering certain options.
One of such options is undoubtedly OFE, if we’re talking about people living in Poland. Since that’s a point of interest for many Polish people, we decided to create an article in which we include the most useful things about it. We touch on such subjects as what is a pension, an overview of OFE, current PL pension rates, calculation of pensions, changes and updates. At the end, we also provide a conclusion to make the decision to participate in this scheme easier.
Overview of OFE
If we decide to participate in OFE, we can theoretically count on more money to spend on things we enjoy the most. Therefore, we can feel free to spend our cash on purchases, movies, streaming subscriptions or renowned casinos on https://uczciwekasyna.com/, for that matter. The world is our oyster, so we can feel free to find out whether we can count on more money with OFE and actually participate in it, or choose to do something else with our money. Here, we’d like to focus on the overview of OFE so that we can more easily decide whether this option is actually viable.
Alright, let’s start for the beginning. The system was introduced with the major state pension Polish reform in 1999, and its full name is The Open Pension Fund. The idea behind is to create a system that includes private management, which can allow us to invest in financial markets. People who created OFE aimed at creating an opportunity to diaries the sources of retirement income, which can be achieved by adding a second pillar of mandatory savings. However, in this case it’s related to private smart pension funds.
It’s worth noting that in the current market of the year 2024, still several millions of Poles participate in this scheme. Just as it’s important to take care of security in terms of digital technology risks, it’s also necessary to decide whether the security of the chosen pensions schemes is satisfactory. That’s why it’s not mandatory anymore, and the entire system has changed significantly since the time of its conception. New entrants to the labor market labor are no longer required to participate in it, which is a relief to some, as it creates more choice for the worker. Overall, we cannot forget that the contributions to this system only represent a portion of the eventual pension credit, while the majority of it is managed by ZUS.
Current Pension Rates
If we’re going to touch on this subject, then we have to remember that the pension in Poland from OFE’s total amount is based on a few different things. To calculate properly, we need to take into considerations such factors as the length of time we have been contributing, and the investment performance of the chosen funds. What’s also important is the specific regulations that are strictly connected with the government of pensions payouts.
Knowing the above, in the current year of 2024, the average people's pension from this system can be estimated based on data provided by the Polish Financial Supervision Authority, also known as KNF. On a month-to-month basis, we can expect that the pension funds are going to amount to around 300 to 400 PLN. Of course, we have to mention again that it is not the entire state PL pension in 2024 that will land in our pockets. This is only an addition to the main part received by ZUS, which is around 2,500 PLN per person in 2024.
These are just average estimates, so we need to remember that these figures can really change, depending on the situation of an individual. If we contribute to OFE for a longer period, we will receive higher returns, which is rather obvious. Furthermore, fewer contributions are going to lead to a smaller minimal pension.
Calculation of Pension
This is not necessarily an easy thing to accomplish. The pension calculator calculates our pensions based on 4 different factors. The accumulated capital is the most important as it is the starting point of making the necessary calculation. It is also necessary to decide how long we’ve been paying, so the payout period counts. What’s also significant is what the investment performance looks like, and how the mortality tables are shaping out. For example, currently 100,000 PLN of contributions over the course of 20 years leads to about 415 PLN of state pension monthly.
Changes and Updates
There were two major changes and updates that we need to mention. The first one comes from 2014, when the partial transfer of funds from OFE to ZUS occurred. The next significant change came to be in 2021, when the voluntary transfer option became a possibility. Thanks to that, we can move our remaining funds to ZUS or IKE.
Conclusion
Overall, the pension’s meaning from OFE may not be significant. However, it can still contribute to a decent chunk of money being paid out monthly as people’s pension. That’s why it’s important to first understand the way it works, how it’s calculated, and how the recent changes matter in the large scope of things.
