Yesterday, the Government approved within the Council of Ministers the preliminary draft law that will include the regulation of the newly created public promotion employment pension plan fund. This legal text seeks to facilitate the creation of collective pension plans within companies. These plans will have public promotion although they will be privately managed and will be constituted within the framework of collective bargaining. Thus, officials will be in charge of choosing the private entities that will make the investments. These plans –with the new figure of the simplified plan, also newly created– will have “low commissions” to facilitate savings for retirement for workers with medium and low incomes from SMEs and for the self-employed, young people and public employees.
In fact, Social Security sources explained yesterday that it will be fundamentally sectoral collective bargaining (of any territorial scope) that will be able to promote the creation of these plans. And companies, especially SMEs, will be able to join them.
Similarly, the associations of self-employed may promote the creation of these new simplified plans. Although these sources highlighted yesterday that the law will also allow the self-employed to adhere to sectoral plans for companies as long as they are related to their activity. However, the specific conditions for adherence of the self-employed to sectoral plans must still be developed by regulation.
After its approval in the Council of Ministers, the Government will send this text to Parliament for processing. From the Executive they did not know how to specify yesterday how long it will take to complete said parliamentary procedure. Although, in parallel, the Government intends to work on the regulatory development of this law to accelerate its implementation.
The company will save almost 400 euros in fees per worker for their contributions
In fact, for the parliamentary procedure and the regulation there have been issues to be specified such as the maximum commission limit that the managers may charge and that, according to Social Security sources reiterated yesterday, could be around 0.3%as was said at the beginning.
What the normative project does incorporate are the tax incentives included in the General State Budgets for 2022 for collective pension plans, which raised the limit on the deduction of the tax base to 10,500 euros, to encourage them, while reducing this limit to 1,500 euros for individual plans, something that has been strongly criticized by the financial sector and managers of these plans, who do not see favorably that individual plans are discouraged without having started the fund of collective plans.
This blueprint includes several innovations, mainly for companies, aimed at promoting the development of these plansyes Among those known yesterday is the rise to 115 euros per month of the amount of contributions from companies to collective pension funds that can be taken from the worker’s contribution base. This would mean being able to exclude up to 1,380 euros per year from these contribution bases, which according to the Ministry’s calculations will mean a saving of almost 400 euros per worker per year.
Likewise, it includes incentives so that the worker can contribute more money than his company with limits that are established based on the business contribution. If the company contributes up to 500 euros per year, the employee may contribute up to 1,250, with which the maximum contribution will be 3,250 as a whole; if the business contribution is between 501 and 1.00 euros, the worker may contribute up to 2,000 per year (4,500 euros maximum contribution); if the employer puts between 1,001 and 1,500 euros, the employee may raise his contribution up to 2,250 euros per year (5,250 euros per year); and if the company puts more than 1,501 euros per year into one of these plans, the worker may match this amount up to a maximum of 10,000 euros per year.
The digital plan management platform can be paid for with European funds
Likewise, the rule incorporates the increase in the deduction for the self-employed for contributions to pension plans that will go from 2,000 to 5,750 euros per year. That said, the Executive did not close the door yesterday to new tax incentives that could be introduced in the parliamentary process if it were agreed in the next tax reform.
Once legislative and regulatory development is complete, interested managers may apply to manage the new publicly promoted pension funds. The promoting commission (made up of officials from various ministries) will select the firms and establish a common framework for the investment strategy.
In addition, the management of a digital platform that allows contracting any of the pension funds, and easily consult the data, will be put out to public tender.
Given the profile of the project, from the Ministry of Social Security they trust that it can be financed with resources from the recovery fund that the European Union has provided for Spain. “It would make perfect sense because of the project’s vocation for digitalization,” they say.
Minimum wage, Mecuida plan and ERTE until March
- Since January. Yesterday’s Council of Ministers had a marked labor accent with the approval, in addition to the pension plan fund for companies, of several important measures that affect millions of workers. Thus, it approved the royal decree that raises the minimum interprofessional salary from 965 to 1,000 euros per month (in 14 payments) with retroactive effect from last January 1. This retroactivity implies that companies must pay the 35 euros difference for the months of January and February (70 euros).
- social shield. Likewise, the Executive also extended the Mecuida plan, until June 30. This plan, which, among other things, allows the adaptation of the day to care or the reduction of it up to 100% with the corresponding salary cut, affects some 300,000 women, according to the Ministry of Labor.
- Extension. Finally, the Executive approved the extension of the current conditions of the Covid ERTE until March 31, but with fewer exemptions for companies. And it approved exemptions until June for the self-employed, who on February 28 will stop charging the extraordinary benefit for Covid.
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