those who earn more than 40,000 euros predominate

those who earn more than 40,000 euros predominate


Supplementary savings for pensions is one of the long-term maxims for the self-employed. Historically, this group has lower contribution bases that result in a gap greater than 500 euros on average between the retirement benefits of self-employed workers and employees. One of the developments in social security in the last legislature have been simplified employment pension plans, designed to try to attract SMEs and the self-employed. In short, to expand coverage to more workers. However, contributions predominate among the highest incomes.

The new simplified employment plans They incorporated as a novelty the possibility of making contributions to collective employment plans for an individual entrepreneur. The combination of contributions to individual plans (1,500 euros) and simplified plans (another 4,250 euros) allows the self-employed to save to complement their pension, with current deductions in Personal Income Tax and Social Security contributions; although the rescue of the plans is taxed as capital in personal income tax as they are computed as income from work.

The profile provided by two financial companies in the pension plan sector, Indexa and Cobasin addition to the vision of the association of self-employed workers, ATA, point in this direction: complementary savings predominate among those who already have higher annual income, as well as higher assets.

Among Indexa’s self-employed clients, those who declare income considerably higher than the average salary in Spain, which is around 27,000 euros gross, predominate, in the range of 40,000 to 60,000 euros per year. Likewise, those whose assets are between 100,000 and 500,000 euros are contributing to the simplified employment plans.

This same feeling is observed in the Cobas plan, which accumulates about 3 million euros. This profile is contributing as much as possible, which is limited to 5,750 euros deductible from income and social contributions. At the same time, there is a greater male presence (80%) within this product.

This product has been in development since July, when the then Minister of Social Security, José Luis Escrivá, carried out the regulations for pension plans and funds. After various reductions in the limit on deductible contributions in individual plans, which fell from 8,000 euros to 1,500 euros in just two years, an attempt was made to strengthen the second pillar.

“40% of the self-employed had contracted individual pension plans before the reform and they were those who had a greater savings capacity or who had them because they were linked to other banking products,” he explains. Celia Ferrero, ATA executive vice president, the association of self-employed workers linked to the CEOE business association. “We believe that at first what is going to occur is a progressive transfer of that 40% in individual plans to simplified plans. We estimate that at least a third of the self-employed will adhere to simplified plans in the next 5 years, but there could be even more if incentives were increased,” he highlights.

The forecasts that the self-employed transmit to the Ministry are conservative. They maintain their income forecast in the low ranges, therefore they quote at a rate with the new contribution system based on real income. The uncertainty and volatility in the activity of self-employed workers, the employers point out, make it difficult to contribute to employment plans despite having expectations of increasing the number of participants in this new savings solution.

“The general containment of salaries on average leaves little or no room for pension savings, with the income needed for current expenses or other more pressing investments such as housing or raising children, which means that in this scenario said savings , even if it were incentivized, it does not constitute an ideal replacement solution for the adjustments that, sooner or later, will have to be made in the pensions of the public pay-as-you-go system due to demographic and longevity factors, among others. It is a medium-long term issue that can have very diverse evolutions.“, reflects the Mercer lawyer and member of Ocopen, Antonio Méndez Baiges.





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