Many Poles are convinced that a university diploma is simply a warrant not only of better work, but besides of higher retirement. Nothing more wrong. The Social Insurance Institution (ZUS) actually takes into account the period of survey in establishing the right to benefit, but it does so on principles that can be rather amazing to many. Although studies can aid to accomplish the required traineeship, there is one, frequently overlooked item in terms of retirement.
It turns out that years spent at university are treated as a alleged non-contributory period. This means that while they can “artificially” extend our work experience, they do not translate into 1 extra gold in the pension account. ZUS clearly communicates: contributions paid mainly count. For those planning their financial future, this is crucial information that can completely change the perception of studies as an investment in future benefits.
Studies as a non-contributory period. What does this mean in practice?
According to Polish regulations, completed higher education courses can be included in the work placement, on which the right to a pension depends. The key is the word ‘completed’. The specified fact of studying for respective years without obtaining a diploma does not give any authority. ZUS will take into account only the period of study, which was culminated in the defence of thesis and the acquisition of a professional title.
This period is classified as non-contributory period. In practice, this means that no contributions were paid to the Social safety Office during their studies. Therefore, although years of survey aid meet the request of duration (20 years for women and 25 years for men), they do not build pension capital. The amount of the future pension depends solely on the sum of the eligible contributions collected on the individual insured account.
This is simply a fundamental difference that many people forget. If a student worked in the course of a survey on a contract of employment or a covered contract, it would be those periods of employment, not the discipline itself, that would have a real impact on the amount of his future benefit.
Eight years limit and one-third rule. Key restrictions on ZUS
Even if we meet the condition of having a diploma, ZUS applies 2 crucial restrictions. First, the maximum period of study, which can be added to the traineeship, is 8 years. It doesn't substance if individual has completed 2 master's degrees, doctoral or postgraduate studies. ZUS won't score more than the statutory limit of 8 years anyway.
The second, even more crucial restriction, is the so-called. one-third rule. It says that the sum of all non-contributory periods (including studies, parental leave or sickness benefits) must not exceed 1 3rd of the proven contribution periods. It's this regulation that verifies how many years of studies we can actually count.
How does this work in practice? Let's see here:
- Person who worked 15 years (contribution periods), may add up to 5 years Non-contributory periods (1/3 of 15 years). Even if her studies lasted longer, ZUS would only score 5 years.
- With 24 years contribution work, the limit of non-contributory periods is 8 years (1/3 out of 24 years). In this case, the full maximum period of survey can be passed.
- If individual has a evidence 30 years work, his limit of non-contributory periods is 10 years. However, in the course of his studies, he will number the maximum 8 yearsBecause that's the advanced threshold for science.
Will your diploma rise your pension? ZUS resolves doubts
It's the most crucial issue that inspires the most emotion. The answer is clear and disappointing to many: No, the specified fact of having a diploma won't rise your pension or your gold.. The pension strategy in Poland is based on the rule of defined contribution. This means that the amount of the benefit is simply a simple derivative of the capital accumulated in the ZUS account throughout his professional life.
Because in the course of our studies (if we do not combine them with work) we do not pay contributions, our pension capital does not increase. ZUS does not grant any additional points, multipliers or bonuses for the level of education. The master's or engineer's degree has the same meaning as the certificate of completion of primary school – that is, none.
Of course, there is an indirect connection. People with higher education are statistically more likely to take better paid positions. Higher earnings mean higher contributions paid to ZUS, which leads to higher pensions in the future. However, it is the consequence of a better salary, not the diploma itself.
For who is it crucial to add studies to the internship?
Although studies do not affect the amount of the benefit, for any groups they are absolutely crucial. First of all, they benefit from it for those to whom lack of years to accomplish minimum work placement the right to retire. Imagine a female who has a five-year master's degree and a documented 16-year contribution work. Without a degree, she would not have a pension (required 20 years). By taking 4 years of survey (in accordance with regulation 1/3) it will meet the request and receive the benefit.
The addition of studies is besides a rescue for those who worked “black” for years had long breaks in employment or worked on contracts from which contributions were not paid. In specified situations, any additional year on paper may decide on the right to at least receive a minimum pension.
To sum up, studies are a kind of "security cushion" in the context of work experience, but not a tool for building retirement. It is an investment in cognition and better prospects in the labour market, which can indirectly translate into higher earnings. However, the future pension is built solely through legal, shelled work and the amount of money transferred to ZUS.
Continued here:
ZUS will charge you 8 years for college until your retirement. But there is 1 key catch.
