Why invest in pension funds?
A commitment to saving
Supplement your future pension with pension funds
The following information only applies for investors residing in Spain.
Spanish pension funds are a form of savings that allow you to supplement your Social Security pension. They imply making a long-term commitment to oneself, as contributions made to pension funds cannot be withdrawn until retirement, unless there are contingencies of disability, dependency or death.
Under exceptional circumstances, the possibility of early redemption is also considered in cases of serious illness, long-term unemployment, eviction from the habitual residence and when the amounts to be withdrawn correspond to contributions made more than 10 years earlier.
Pension funds are also characterized by their transparency, the daily publication of the Net Asset Value (NAV) and the status of the saver’s investments, the periodic reporting on the composition of the fund’s portfolio, and for the ability to transfer to another pension fund or management company.
Contributions to a pension fund are flexible, there are no set minimums and the amounts may vary annually and may even be suspended.
Making them one year does not oblige the same in the following. In addition, one or more annual contributions can be made as long as the maximum of 1,500 euros per year is not exceeded, according to existing Spanish legislation.
Making periodic, monthly or quarterly contributions helps an individual fulfill his or her savings commitment.
What is it and who can invest?
Pension funds are accessible to people with earned income.
Savers who invest in a pension fund are called participants. Once the investment amount has been entered, a number of units are acquired based on the net asset value of the fund on the transaction date.
The net asset value of each fund is calculated by dividing the value of the net assets
by the number of units outstanding.
The supervisory body under which the pension funds are integrated is the Directorate General of Insurance and Pension Funds (DGSFP), which reports to the Spanish Ministry of the Economy.
Queries?
Taxation of pension funds
We facilitate your investments
The following information only applies for investors residing in Spain. Please contact your legal advisor.
Pension funds offer encouraging tax benefits, as contributions made annually can be deducted from the Income Tax base as long
as they do not exceed 30% of your net income from work and 1,500 euros per year, in compliance with existing regulations.
The higher the marginal Income Tax rates, the greater the tax benefits. At the same time, they allow tax payment to be postponed at the time of retirement,
they allow tax payment to be postponed at the time of retirement, that is, when the marginal income will be logically lower.
Taxation for the saver occurs at the time of redemption, when the amount is incorporated into the Income Tax return.
In the event of the death of the owner, the legal heirs or expressly assigned beneficiaries do not incur Inheritance Tax, but are liable for Income Tax payment when they have the inherited capital.
Questions?
