In the Polish pension strategy there was a silent revolution that could change the financial situation of thousands of people. Social Insurance Institution (ZUS) started automatic conversion of pensions, which for many women means crucial increases in benefits. Most importantly, the full process takes place on its own — without having to submit any applications or documents. This is an unexpected breakthrough that will bring real financial benefits, especially for women who have retired in fresh years.
This mechanics is simple and beneficial for recipients. ZUS compares 2 options of calculation of pensions: the first and the new, based on updated data. A higher amount is always chosen, which guarantees that no 1 on this shift will lose. For many pensioners it is simply a chance for the first specified a large rise in years, which can improve their regular budget and comfort of life. The changes concern a circumstantial group of persons and the amount of the increase is closely linked to the year of transition to benefits.
How does the automatic conversion of pension work? That's what you request to know
The fresh mechanics introduced by ZUS represents a real breakthrough in the approach to the recipients. The key information is that conversion takes place full automatically. This means that authorised persons do not gotta take any action, fill out forms or queue at the office. The Social Insurance Institution itself initiates the procedure and verifies whether the recalculation of the benefit will be more favourable.
In practice, ZUS takes into account the accumulated pension capital and calculates the amount of the benefit again, utilizing current indicators. It then compares the consequence with the amount paid so far. If the recently calculated pension is higher, the recipient will receive a higher amount with compensation. If, on the another hand, the fresh calculation was little favourable, the pensioner will proceed to receive a benefit to date. This is so a completely safe and risk-free solution for pensioners.
This "silent revolution" aims to bridge the differences arising from changes in regulations and economical indicators that have taken place in fresh years. This makes the strategy fairer for those who have completed their professional activity at a little favourable time.
Who gets the most? The key is the retirement year.
The scale of the rise is awesome and straight depends on which year the female retired. The analysis shows that the best benefits will be for the ladies who have completed their work in fresh years. This is due to the fact that their pension capital has been reduced and the fresh conversion takes into account all cumulative increases.
According to estimates, the increase in benefits may be as follows:
- Retirement year 2017: increase of 36.5%
- Year of retirement 2018: 43.3% increase
- Retirement year 2019: increase by 47.6%
- Year of retirement 2020: increase of 61.5%
- Year of retirement 2021: 61.4% increase
- Year of retirement 2022: up to 71.2% increase
Apparently, record holders can number on a rise of more than 70% their current benefits. It is simply a immense difference that will actually affect their home budgets. Even for women who have been receiving retirement since 2017, an increase of more than a 3rd is highly noticeable. This shows the importance of valorisation mechanisms in the pension system.
Why so large a raise? ZUS explains the mechanism
Such a crucial increase in benefits is due to the confluence of respective key economical and demographic factors that the Social safety Office takes into account erstwhile recalculated. First, it's about annual weighting of contributions registered in a pension account. Valorisation rates depend on inflation and the emergence in contribution footnotes and have been record-high in fresh years.
The second fundamental component is alleged life expectancy. This is simply a statistical parameter published by the Central Statistical Office, which determines the life expectancy for people of a given age. The older the person, the lower the rate. erstwhile calculating the pension, ZUS divides the accumulated capital by the number of months of further life. If the conversion occurs respective years after reaching retirement age, the denominator of this action (number of months) is smaller, which automatically leads to higher monthly benefit amount.
The combination of these 2 mechanisms — the advanced value of capital and the lower life expectancy — makes the recalculation of the pension so spectacularly successful a fewer years after its granting.
Do I gotta apply? erstwhile it is worth to act alone
In principle, in the case of the conversion action described, No request to do absolutely nothing. ZUS itself identifies eligible persons and makes the essential calculations. This is simply a immense facilitation that eliminates bureaucracy and saves pensioners time. However, it is worth remembering that there are situations in which same - action can bring additional benefits.
An application for recalculation of the benefit is worth submitting if from the minute of granting the pension We've got fresh documents.which may affect its height. This may be, for example, a occupation certificate that confirms additional years of employment or earnings papers from a period that has not previously been included. Any additional contribution or non-contributory period, as well as higher earnings, can rise the basis for the pension dimension.
Therefore, if you are in possession of papers that ZUS did not have at the time of the grant of the benefit, the submission of an application for recalculation of the pension is most desirable. In another cases, it is adequate to wait patiently for a decision from the public. The Social Insurance Institution has already started the process and increased benefits will be paid gradually, with compensation from the minute erstwhile the fresh calculation became more favourable.
Continued here:
ZUS converts public pensions. Thousands of Poles get 70% more!
