Retirement insurance - everything you need to know


Every employee knows that social security contributions are deducted from his salary. Why do we have to compulsorily pay pension insurance contributions? Are we aware of how the pension system works? What age must you reach to qualify for a benefit such as a retirement pension? Find out more about retirement insurance!

Retirement - what is it?

A retirement pension is a financial benefit intended to provide money to people who are unable to work because of their age. This means that the pension is intended for those who have lost the opportunity to work and do not have other sources of income to guarantee their subsistence.

Pension systems

There are two types of pension systems:

  1. Old retirement pension - applies to people born before January 1, 1949, who have reached the retirement age and have documented the required period of employment. When calculating pensions for these people, the length of contributory and non-contributory periods as well as the calculation basis for old-age pension insurance contributions are taken into account.

  2. New retirement pension - applies to people born after December 31, 1948. Here, the length of service is irrelevant. The amount of the pension we receive depends on the amount of funds collected on the individual pension account with ZUS. Both the contribution periods for retirement and the non-contributory insurance are taken into account when calculating the initial capital.This capital determines the sum of the insured person under the old pension system, i.e. before January 1, 1999.

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Retirement insurance and retirement age

In the case of the old-age pension determined under the old rules, i.e. for people born before 1 January 1949, the right to the benefit is acquired if:

  • they have reached the retirement age of at least 60 for women and 65 for men,

  • they have contributory and non-contributory periods totaling 20 years for women and 25 years for men.

The situation is different for people born after December 31, 1948. Here, the retirement age depends on the date of birth and by 2040 it will be equal for men and women. From the beginning of 2013, it is raised every 4 months and 1 month. The level of 67 for men will be reached in 2020, and for women in 2040 - this means that by the age of 67, women 40 years old and younger will work.

Three pillars in the Polish pension system

After reaching the appropriate age, people covered by the pension insurance have raised capital, which will be paid out in the form of a retirement pension. Usually, it is not very high and is only a part of what we have earned throughout our working life. Currently, only the first pillar is mandatory for:

  • running a business,

  • full-time employees,

  • persons providing services under a contract of mandate,

  • Freelancers.

I pillar - the Social Insurance Fund

This pillar is managed entirely by the Social Insurance Institution. It is based on a generational contract - pensions are financed from the contributions of those currently working who pay contributions to the pension insurance. This means that the money paid to ZUS is not invested anywhere, and is intended for payments to people currently receiving benefits. It is the individual ZUS account that most of the contributions deducted from the salary each month. The pension contribution rate is 19.52% of our monthly salary. And it is the amount of the contributions paid to the system that determines the amount of our future pension from the first pillar.

Currently, the amount of contributions to an individual ZUS account is 12.20%. The remaining part in the amount of 7.30% may go to the ZUS sub-account or be divided. For split, it looks like this:

  • 2.92% of the calculation basis is transferred by ZUS to the pension fund selected by the OFE,

  • 4.38% of the basis of assessment is credited to the sub-account at ZUS.


Contributions accumulated on the sub-account, as opposed to contributions to an individual ZUS account, are inherited.

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Pillar II - Open Pension Fund, i.e. OFE

The second pillar is managed by Universal Pension Societies. Pension insurance contributions to OFE are paid on a voluntary basis - if the insured does not decide to join an OFE, the contribution of 2.92% will go to the ZUS sub-account.

Each insured person can choose the Pension Society that will run his Open Pension Fund. The capital accumulated on an individual account in OFE is then invested in various instruments available on the capital market, thanks to which its value is increased.


Contributions paid in the second pillar are exempt from income tax and are inherited.

III pillar - IKE, IKZE, PPE

The third pillar is also defined as all other voluntary forms of saving for future retirement. This pillar of the social security system includes:

  • occupational pension schemes (PPE),

  • individual retirement accounts (IKE),

  • individual pension security accounts (IKZE).

In the case of the 1st and 2nd pillars, the amount of contributions for retirement insurance, transferred to the given accounts, is determined in advance. As for the value of payments to the account of the third pillar, it is not specified in any way and depends solely on our financial capabilities. Each of the insured has the right to decide what form of saving he will choose and which financial institution we entrust our money to. The money accumulated in the last pillar of the pension system may be paid out in one installment upon reaching the appropriate age or in installments. They are also inherited by the closest family members.


An incentive for additional savings is the fact that the capital gains of investments carried out under the third pillar (IKE, IKZE, PPE) are exempt from 19% income tax. What's more, payments to IKZE also allow for the deduction of payments made from the tax base.

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