The pension system is in the sights of the Government and the Spanish. With the aim of reforming it and making it profitable, the promotion of collective business plans It will be one of the main initiatives that the Executive of Pedro Sánchez develops in the year 2022 so that both the self-employed and civil servants and workers of SMEs (and not only employees of large companies, as until now) can complete your public pension with a deferred salary that allows them to enjoy a quiet retirement.
These collective employment plans are now a minority in Spain, although among its advantages are that “the company can make contributions on behalf of the worker, they tend to be cheaper (they have fewer commissions) and they are more efficient in the result,” he states. Antonio Gallardo, financial expert of iAhorro. Another is that when hiring a company collective pension plan we make sure that regular contributions of money will be made to it, since “one of the handicaps that individual pension plans entail is that they are usually abandoned very soon,” adds Gallardo.
But there are other individual pension plans that can be very beneficial for the user if you know how to choose them well. The first thing to keep in mind is that they are the only savings-investment product that tax deductible in the IRPF because “they are taxed as income from work instead of as equity income,” explains Gallardo. Of course, the current contribution limit to individual pension plans (and relief) is 2,000 euros per year, when in 2020 they were 8,000, figure that the Government plans to reduce to 1,500 euros.
Despite this, Ignasi Viladesau, investment director of MyInvestor, encourages citizens to look for “other complementary products Like the mutual funds or indexed portfolios “ and even improve your current pension plan. “Many citizens already have thousands of euros in pension plans with high commissions and low returns, and they are unaware that they can transfer their money from one pension plan to another, between different entities, without commissions or tax repercussions and that, in addition, they can invest in several plans at the same time, “says the investment director of the online neobank.
To hire a good pension plan you have to “know what to invest in and choose the one with the lowest commissions”says iAhorro’s financial expert. And it is that “we are talking about a long-term product that offers various investment options: from the safest to the most risky.” What does the choice depend on? In much of the time we have. “If we have a long way to go for retirement, we can opt for the riskier (equity) plans, since we have a long time to recover them. As we have less time left, we can opt for products with less risk (fixed income) ”, adds Gallardo. Among the most risky, Viladesau highlights “the new investment methods, such as indexation, which allow costs to be greatly reduced”.
These indexed plans invest money in the stock market following an index such as the Ibex or the Dow Jones. “They are variable income, they carry more risk, but they also have greater potential and much lower commissions “, assures the iAhorro expert.
For his part, the investment director of MyInvestor clarifies that there is a “Big difference between the maximum management fee for an equity plan (1.5%) and the management fee for the cheapest indexed pension plan in Spain (0.30%)“Thus, for example,” throughout a working life of 40 years with maximum periodic contributions (2,000 euros per year) in a high risk plan, the difference between paying the maximum management fees (1.5%) or minimum (0.3%) could reach almost 100,000 euros “.