Employee Capital Plans in Poland (2020–2024): Performance measurement and a rolling returns perspective
Employee Capital Plans in Poland (2020–2024): Performance measurement and a rolling returns perspective

Summary/Abstract: Employee Capital Plans (ECP; in Polish: Pracownicze Plany Kapitałowe — PPK), introduced in Poland in 2019, are a voluntary, long-term savings scheme designed to supplement the public pension system and improve the financial security of the future retirees. The program features automatic enrolment and offers highly favorable conditions for participants, thanks to employer contributions and government subsidies. This article evaluates the performance of savings within the PPK framework from 2020 to 2024, focusing specifically on how the entry date into the program affects investment outcomes. The analysis covers the period from January 1, 2020 to December 2, 2024, and takes into account employee contributions, employer contributions, and state subsidies. The study examines indicators for the individual Target Date Funds (TDF, in Polish: Fundusze Zdefiniowanej Daty — FZD), and averages them for groups of funds with target dates ranging from 2025 to 2060. The study is complemented by a dynamic performance assessment that utilizes a rolling returns methodology. In this analysis, we iteratively calculate the Internal Rate of Return (IRR) for investments that begin on consecutive business days, starting from January 1, 2020, while using a fixed 24-month window for each calculation. By employing rolling returns analysis, this method reduces the impact of selecting a single start and end date on the assessment of investment performance. It also provides a more detailed understanding of how the investment start date influences the results.

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