The pension plans appear to Spain in the late 80s. They are a way of saving significant tax benefits, aimed at obtaining an income at the time of retirement. It is a complementary system to the pension provided by Social Security.

A pension plan is a method of group savings, which is to deliver an amount of economic periodically to a fund managed by professionals, responsible for obtaining the highest return on investment.

The pension plans are controlled by the Directorate General Insurance of the Ministry of Economy and FinanceIts operation is responsible for control of the commission plan and the commission's pension fund.

Features

People who hire a pension scheme, called partners, contributing to be paid into a fund. This may be composed of various pension plans. The management company is responsible for investing the fund's capital to generate the highest possible return.

The maximum annual contribution allowed is € 10,000 until age 50 and € 12,500 from that age, although there are special conditions for the disabled.

Benefits of pension schemes

The benefits of pension schemes are charged when the participant retires, is unfit, incurs any serious illness or is in a situation of long-term unemployment.

Benefits can be collected in the form of capital, that is, in a single payment in the form of income, which involves a series of payments, or as mixed. The income can be, in turn, life or temporary.

Taxation

The tax advantages of a pension plan refer to the possibility of a participant deduction on your income tax returns the amounts contributed to the plan.

Inputs generate savings in the income tax returns of up to 43% throughout the country, with the exception of Navarre, where the maximum reduction is 42% and the Basque Country, with a cap of 45%.

If receiving disability or retirement benefits in a single payment and having spent more than two years after the first contribution, the participant can apply a tax reduction of 40%. This advantage can be applied only once.

When the benefits of the pension scheme will receive in the form of rent, not only does not apply any deduction in the tax return but that the amount is subject to a withholding tax.

Recovery before retirement

The person who wants to hire a pension plan should know that it can only recover the contributions deposited before retirement:

·  Grave's Disease.

·  Long-term unemployment, ie at least 12 months.

·  Disability.

·  Termination of employment status regulated by the Ministry of Labor.

Worth noting

The pension plans also have the advantage of allowing the change of plan to another. This may entail some expense, but is usually minimalIf the cost of change is very high, the participant must denounce it before a consumer association.

Remarks

Sometimes pension plans can be confused with retirement plans, although they are two separate concepts. A retirement plan is an insurance policy taken out a time-bound framework, which guarantees the payment of an amount in the event of economic survival and another in the event of the death of contractor.