Employee Capital Plans — PPK (pracownicze plany kapitałowe) — are an important part of the pension system in Poland, allowing employees to save for the future over the long term. However, PPK is closely tied to employment with a specific employer, which raises questions about the continuity of saving when companies undergo organisational changes. Conversions, mergers and divisions of companies are natural processes in the economy, and they can affect the legal status of the employer and therefore how Employee Capital Plans work. The employer's PPK contributions are also one of the components that make up the total cost of employing a worker.
The effect of an employer's restructuring on the right to save in PPK needs a detailed discussion because of the complexity of the law and the variety of situations that can arise in business practice. The distinction between legal succession and continuation is crucial for preserving the continuity of employees' saving and for defining the obligations of the new or converted employing entity.
Organisational restructuring of employers in commercial law
Entities that employ staff may undergo various organisational and legal changes that significantly affect their legal status and the continuity of their business. These processes are regulated in detail in commercial law, in particular in the Commercial Companies Code (Kodeks spółek handlowych, KSH), which sets precise rules and procedures for each type of restructuring.
Types of organisational restructuring
The main types of organisational restructuring are:
- Merger of companies by acquisition
- Merger of companies by forming a new company
- Division of companies by acquisition
- Division of companies by forming new companies
- Conversion of a company's legal form
A merger of companies can take place by one company taking over another or by forming a new company that takes over the assets and liabilities of the merging companies. The process requires a detailed merger plan and the relevant approvals of the companies' bodies
Division of companies is another type of restructuring that can take different forms depending on the owners' business needs and strategy. It can be a division by acquisition, where existing companies take over parts of the assets of the company being divided, or a division by forming new companies, which arise from the division of the original entity's assets. For shareholders, the tax consequences also matter, especially on profit distribution after a company transformation.
Conversions of companies differ from mergers and divisions in that they do not create new legal entities but change the legal form of an existing company. An example is the conversion of a sp. z o.o. (limited liability company) into a joint-stock company (spółka akcyjna) or the other way round, while preserving the continuity of the business and the legal identity of the entity.
Under Article 494 of the Commercial Companies Code, the acquiring or newly formed company assumes, on the merger date, all the rights and obligations of the acquired company. This means full universal succession covering all assets and liabilities
The rules of succession in a division of companies are set out in Article 531 of the Commercial Companies Code, which provides that the acquiring or newly formed companies created in the division assume, on the division date, the rights and obligations of the divided company specified in the division plan. This means that the scope of the rights and obligations taken over is limited to what is provided for in the division documents.
Conversions of companies are governed by Article 553 of the Commercial Companies Code, which introduces the principle of continuation instead of succession. The converted company holds all the rights and obligations of the company being converted, which means that there is no break in the legal continuity of the entity — only its organisational and legal form changes.
Case law on succession and continuation
Court practice provides important explanations of the differences between succession and continuation in the context of company restructuring. The judgment of the Court of Appeal in Kraków of 19 April 2021, case no. I ACa 1261/20, precisely defines universal succession in company mergers.
The Court of Appeal in Kraków held that succession to civil-law rights and obligations means that the successor companies assume all the rights and obligations of the acquired companies on the merger date. The legal construction of universal succession was adopted, which takes place by operation of law without any additional steps beyond the merger procedure.
The judgment stresses that universal succession covers all tangible and intangible assets, including rights in rem and receivables. The legal effect occurs automatically on the merger date, which is important for the continuity of all legal relationships, including PPK management and PPK operation agreements.
Universal succession takes place by operation of law on the date of the merger of companies and covers all tangible and intangible assets. No additional legal steps are needed beyond the merger procedure provided for in the Commercial Companies Code
A different approach is taken by the NSA (Supreme Administrative Court) in its judgment of 12 August 2020, case no. II FSK 1678/18, which distinguishes between succession and continuation depending on the type of restructuring. Where one company is converted into another commercial company, there is no succession but continuation.
The court explained that the principle of continuation follows from Article 553 § 1 of the Commercial Companies Code, under which the converted company holds all the rights and obligations of the company being converted. This means that the converted company does not assume the rights and obligations but remains their holder throughout.
In a conversion of a company the principle of continuation applies, not succession. The converted company does not assume the rights and obligations but remains their holder throughout, preserving legal continuity
This distinction is fundamental for how PPK works in practice, as it determines how PPK management and operation agreements are treated and whether employees can keep saving without interruption.
The employer's role in the PPK system
The employer plays a key role in Employee Capital Plans, acting as an intermediary between employees and the financial institutions that manage the funds. Under Article 2(1)(21)(a) of the Act of 4 October 2018 on Employee Capital Plans (consolidated text, Journal of Laws (Dz.U.) 2026 item 192), an employer with an identification number is an employing entity within the meaning of that Act in relation to its employees.
The employer's main obligations in PPK
- Concluding a PPK management agreement with a chosen financial institution (Article 9(1) of the PPK Act)
- Concluding PPK operation agreements that set out the detailed terms of the plans
- Making basic contributions and — if the PPK management agreement provides for them — additional contributions for employees
- Administering the saving process and communication with participants
- Submitting, on the participant's behalf, requests for a transfer payment of funds from PPK accounts kept with other employers (Article 19(4))
- Passing information on participants' declarations to the financial institution, e.g. on opting out of contributions (Article 23(3))
- Informing employees of their rights, e.g. of the option for people aged 55–70 to submit an application (Article 15(2))
For employees to be able to build up savings in PPK, the employer must carry out a number of specific legal and practical steps. First of all, this means concluding a PPK management agreement with a chosen financial institution, which will be responsible for managing the funds and investing employees' money.
The employer concludes the PPK management agreement and the PPK operation agreements with a chosen financial institution. It is also responsible for financing part of the PPK contributions and for submitting transfer payment requests on participants' behalf; payments and returns of funds are made by the financial institution at the PPK participant's request
In addition, the employer must conclude PPK operation agreements, which set out the detailed terms of the plans for individual employees. These agreements govern the practical aspects of saving, such as how contributions are made, how funds are managed and how payments are made.
An important part of the employer's role is its share in financing PPK contributions. The employer must make basic contributions (1.5% of pay, Article 26(1)) and — if it has declared them in the PPK management agreement — additional contributions of up to 2.5% of pay (Article 26(2)) for employees, which makes it a co-participant in the saving process. This financial participation underlines the importance of the employer's legal continuity for the functioning of the system. Employers can hand PPK contribution calculations and payroll over to us through our HR and payroll services.
The employer also acts as the administrator of the saving process, being responsible for submitting transfer payment requests on the participant's behalf when an employee changes employer (unless the participant objects) and for passing participants' instructions and declarations to the financial institution; the payments and returns themselves are made by the financial institution at the participant's request.
Procedures in the case of succession or continuation
When an employer's restructuring involves legal succession or continuation, the situation of employees participating in PPK remains stable and no additional action is needed. In such cases the PPK management agreement concluded by the previous employer, or by the same employer before its conversion, remains in force. The exception is a merger of employing entities that both run PPK — then the acquiring entity must conclude new PPK operation agreements (Article 9(2)(2) of the PPK Act, described below).
Procedure in the case of legal succession
- Automatic transfer of all PPK-related rights and obligations to the new entity
- Continuity of PPK management agreements with financial institutions
- Employees continue saving on the existing terms
- All existing terms of participation in PPK are maintained
- Informing employees about the organisational changes and their effect on PPK
Legal succession means that the new employer automatically assumes all the PPK-related rights and obligations that its predecessor had. This applies both to agreements with financial institutions and to obligations towards employees participating in the plans. The process runs without disruption for saving employees.
In the case of legal succession or continuation of the employer, the PPK management agreement remains in force. Employees continue saving on the existing terms without having to take any additional action
Continuation in a conversion means that the same legal entity, although in a new organisational form, keeps all its PPK-related rights and obligations. Employees can therefore continue saving on the existing terms without any obstacles.
In both situations, employees participating in PPK keep saving on the same terms that applied before the restructuring. This applies to all key aspects of how the plans work:
- How additional contributions financed by the PPK participant are declared and how their amount is changed
- The target date funds managed by the entity managing the financial institution
- The terms of building up funds and the rules for managing them by individual target date funds
- How declarations on splitting contributions between different target date funds are submitted
Continuity of PPK also covers the ways of changing the target date fund, the terms and deadlines for payments and the procedures for participants' instructions. The rules on informing participants about the funds in their PPK accounts also remain unchanged
In addition, the terms, deadlines and methods of making payments, transfer payments or returns of funds accumulated in PPK remain unchanged. The procedures for participants' instructions are not modified either, which keeps the system running smoothly.
The rules on the scope, frequency and form of informing PPK participants about the funds in their accounts also remain unchanged. The employer or the financial institution continues to provide information as previously agreed.
Situations that require additional action
Not all organisational changes of employers involve automatic succession or continuation of PPK-related rights and obligations. Article 9(2) of the PPK Act provides special procedures for the acquisition of the business (or an organised part of it) of another employing entity and for a merger of employing entities that run PPK.
Cases that require active steps by the employer
Special rules apply to the following situations:
- Acquisition by an employing entity of the entire business of another employing entity
- Acquisition of an organised part of the business of another employing entity
- A merger of employing entities that run PPK (including a merger of companies under the KSH, with universal succession)
- Taking over a business by means of a business acquisition agreement, outside the KSH procedures
An employing entity that has acquired a business or an organised part of it must conclude PPK operation agreements within 7 days of the acquisition. The agreements are concluded with the same financial institution with which the acquiring entity has a PPK management agreement
Procedure in cases without succession
- Identifying the legal nature of the organisational change
- Establishing the PPK status of the employees taken over
- Concluding PPK operation agreements within 7 days of the acquisition
- Coordinating the transfer of funds with the financial institution
- Informing employees about the new PPK rules
- Verifying the periods of employment that give the right to participate
- Handling employees' declarations on PPK participation
The same obligations arise in a merger of employing entities that run PPK — Article 9(2)(2) of the PPK Act also applies where the merger involves universal succession under the Commercial Companies Code. The acquiring entity must then take active steps to preserve the continuity of saving for the employees of the acquired entity.
The key deadline is 7 days from the date of the acquisition or merger, within which the employing entity must conclude PPK operation agreements. This deadline is relatively short, which underlines the importance of preserving the continuity of employees' saving and minimising disruption to the system.
PPK operation agreements must be concluded with the same financial institution with which the acquiring employing entity already has a PPK management agreement. This simplifies procedures and keeps fund management consistent.
Scope of obligations towards different groups of employees
The obligations of an employer that acquires a business or is the acquiring entity differ depending on the PPK status of individual employees. The legislator has provided a differentiated approach to different categories of employees, taking into account their previous participation in the plans and whether they meet the conditions for participation.
Categories of employees and their rights
| Employee category | Age | Period of employment | PPK status | Action required |
|---|---|---|---|---|
| Existing PPK participant | No limit | No limit | Automatic participation | Conclude a PPK operation agreement |
| New employee | Under 55 | 3 months | Automatic participation | Conclude a PPK operation agreement |
| Older employee | 55-70 | 3 months | On application | Conclude an agreement after the application |
| Employee with an opt-out declaration | No limit | 3 months | No participation | No action (unless they withdraw the declaration); every 4 years contributions resume from 1 April (Article 23(5)–(6)) |
| Employee without the required period | No limit | Less than 3 months | Not eligible | No action until the period is reached |
For employees taken over who were PPK participants with the previous employer, the obligation to conclude PPK operation agreements arises within 7 days (Article 9(2) of the PPK Act) and does not depend on the period of employment with the new entity. These employees can continue saving with the new employing entity, which supports the continuity of their long-term retirement plans. Taking over employees also brings ZUS obligations, described in transfer of an undertaking and ZUS IWA.
Employees who were not previously PPK participants automatically become participants with the new employer if they have a 3-month period of employment and are under 55. However, they must not have submitted a declaration opting out of PPK contributions
Special rules apply to employees who were not PPK participants with the previous employer but meet the conditions for participation with the new employer. If they have a period of employment of 3 months (Article 16(1) of the PPK Act) and are under 55, they automatically become PPK participants, unless they have submitted an opt-out declaration.
The situation is different for employees who are 55 or older but under 70. For them, participation in PPK with the new employer requires an application, which means they can choose whether they want to join the plan.
Procedures for different categories of employees
- Employees taken over who were PPK participants with the previous employer
- Employees with a 3-month period of employment, under 55
- Employees with a 3-month period of employment, over 55 (on application)
- Employees who do not meet the conditions for PPK participation
- Employees who have submitted an opt-out declaration
Rules for counting periods of employment
Establishing periods of employment is crucial for determining employees' right to participate in PPK with the new employer. The PPK Act sets detailed rules for counting these periods, which take into account employment with the previous employer and, in certain circumstances, with other employers.
Rules for including periods of employment
Under Article 16(2) of the PPK Act (and for homeworkers — Article 16(3) in conjunction with Article 23¹ of the Labour Code (Kodeks pracy)), the following rules apply:
- Periods of employment from the previous 12 months with the same employer are included
- Periods with other employers are taken into account in the case of legal succession
- Periods of employment from the previous 12 months are added together even if there were breaks between them
- Rights are preserved in organisational restructuring
Periods of employment that give the right to participate in PPK include periods from the previous 12 months with the same employer and periods with other employers if the new employer is the legal successor in the legal relationships
In addition, the period of employment includes periods of employment with other employing entities if, under separate provisions, the employing entity is the legal successor in the legal relationships established by the employing entity that previously employed the person. This rule is particularly important in the context of employers' restructuring.
Applying the rules for counting service in practice
- Establish the start date of employment with the previous employer
- Verify the continuity of employment in the preceding 12 months
- Check the legal nature of the change of employer (succession/no succession)
- Include periods with legal predecessors in the total length of service
- Determine the employee's right to participate in PPK
- Record the findings in the employee's personnel file
This means that in the case of legal succession the new employer must take into account the employee's entire period of employment, including the time worked for the legal predecessor. This approach ensures fair treatment of employees and preserves the continuity of their pension rights.
These rules are particularly important in complex restructuring, where an employee may be employed by several related entities in a short time. Taking into account periods of employment with all legal predecessors ensures that the employee is not deprived of rights because of organisational changes beyond their control.
Practical aspects of preserving PPK continuity
Preserving the continuity of PPK during an employer's restructuring requires careful planning and coordination between all the parties involved. It is crucial to correctly identify the legal nature of the organisational changes and their effect on the legal status of the employing entity.
Preparation before the restructuring
Employers planning organisational restructuring should consider the following:
- Legal analysis of the nature of the planned restructuring
- Identifying the effect on PPK management and operation agreements
- Preparing a schedule of PPK-related actions
- Coordination with the financial institutions managing the funds
- Preparing communication for employees
- Verifying the documentation of employees' periods of employment
For restructuring involving succession or continuation, the process is relatively simple because rights and obligations pass automatically (except for the merger of entities running PPK described above, which requires PPK operation agreements to be concluded within 7 days). Even in such cases, however, it may be necessary to inform employees and the financial institutions managing PPK.
Employers should inform employees in good time about planned organisational restructuring and its effect on PPK. Early communication helps avoid uncertainty and ensures a smooth transition to the new organisational structure
Procedures where there is no legal succession
Where new PPK operation agreements must be concluded, it is crucial to meet the 7-day deadline and to coordinate properly with the financial institutions. Delays may lead to breaks in employees' saving and legal complications.
- Identify all employees eligible to participate in PPK
- Prepare documentation on periods of employment
- Conclude PPK operation agreements within 7 days
- Coordinate the transfer of funds from existing PPK accounts
- Inform employees about the new rules
- Handle employees' declarations on participation
- Monitor that the system works properly after the restructuring
Proper preparation of documentation on employees' periods of employment is also important, as it may affect their right to participate in PPK with the new employer. This is particularly important where continuity of employment covering periods with different employers must be shown.
Employers should also consider the transfer of funds accumulated in employees' PPK accounts if the organisational change requires the savings to be moved to a new financial institution. This must be done in accordance with the PPK Act (Article 19), and the participant may refuse the transfer payment — the funds then remain in the existing PPK account.
