what is a private pension plan and what companies offer it
pensions and ongoing reform of the current public system and pay-as-you-go with the aim of guaranteeing these benefits for the next three decades are already an important part of the political, social, economic and citizen debate, because any decision taken now will be transcendental and will determine the greater or lesser amount of payroll of future retirement and the welfare of pensioners. Percentages, numbers, averages or salary increases do not escape this debate, from which it is suggested that pensions, achieved thanks to decades of work, are on average higher than a good part of salaries, but that in a more than considerable percentage , greater than 50%, do not reach 1,000 euros, the equivalent of Interprofessional Minimum Wage (SMI).
But how much do pensioners really earn? Several statistics can reflect the income – always average – that this heterogeneous group receives – it is difficult to find an equal benefit – and whose payments are determined by dozens of circumstances. The main monthly salary reference is found in the statistics of the Social Securitythe body headed by Jose Luis Escrivaand shows that up to 380,000 pensioners received the maximum pension of 2,820 euros in 14 payments and even a little more in certain cases, due to the delayed retirement supplement or gender gap.
Differences between private, public pension and pension plan
However, it is about public pensions, but there is a lucky group of workers who also receive private pensions, which are paid by the company and must be declared, to complement the benefits of the pay-as-you-go system. Precisely these contributions generated by company pension plans mean that there is an ‘elite’ of pensioners who receive more than 45,400 euros annually. The tables of the Tax agencythe last ones are dated 2020, show that until 110,000 taxpayers they were receiving pensions considerably higher than the maximum.
The figure surely has not changed much compared to the last fiscal year, 2021, and statistics show that up to 25,000 retired taxpayers receive benefits of more than one hundred thousand euros. These ‘hundred-mileurists’ they are workers with high wages who also benefited from these plans. A very important plus for retirement. Pensioners are obliged to declare, although those who receive benefits for permanent disability, invalidity, orphanhood or exceptional terrorism or gender violence, do not pay the Treasury for their pension. As pointed out to Information Jose Maria Mollinedogeneral secretary of the Treasury Technicians (Gestha), pensioners pay the Treasury for work income, although in many circumstances, such as age or disability, their accounts with the Treasury are lower, “but the same thing that could happen to a worker who is still active after age 65 or has some degree of disability”.
He points out that the same thing can happen to a retiree with minor children, who can avail themselves of certain fiscal benefits designed more for young taxpayers. A look at the Treasury statistics shows that men are the majority who benefit most from company pension plans, eight out of ten. The data of the Tax agency, that concern 9.5 million pensioners also show the salary gaps, since in 2020, up to 2.6 million pension beneficiaries received less than 9,080 euros per year, divided into 14 payments, which represents just under 648 euros per month. The largest group, three million, accredits pensions between 13,000 and 18,000 euros. More than half of the female pensioners They are in that range.
What are corporate pension plans?
Company pension plans, a very attractive bonus or plus that companies distribute to their workers and from which they benefit from high levels of remuneration, are a savings-prevision instrument that, through small contributions, complement the public retirement pension when workers leave. In a context of uncertainties and changes they are very interesting. It is the company that makes the money contributions, although, exceptionally, some are open to worker contributions.
Three types of company pension plans. differences
as collected BBVA Through his blog on pensions, there are three types of pension plans for companies: Defined contribution: the annual amount that both the company and the worker contribute to this company pension plan has been previously determined by both parties. “This does not guarantee or define, and it is something to take into account, the amount of benefits that, in the future, will be made to said plan.” Defined benefit: the amount to be collected by the pensioner is previously agreed and is linked to the labor circumstances of the worker with salary or seniority. And a mixed System, which combines the previous two.
How business plans are managed and taxation
The pension plans for companies are linked to a pension fund and their management depends on a management company, supervised by the General Directorate of Insurance and Pension Funds. Representatives of workers, companies and beneficiaries are those involved in the development and good management of these interesting private plans. A solution to the crisis of public pensions but that requires a very important extra effort from companies. Refering to taxationare considered returns in kind in the income tax, and as such they must be included in the Income Tax return. The limits established in 2022 were 8,500 euros for the company and 1,500 euros for the worker, per year.
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