Frequently Asked Questions about Pension Plans
Check the most common doubts
Since 2021, how are the legal limits of contributions to individual pension plans?
It has been limited to a maximum of € 2,000 per year the legal limit of individual contributions by any person for all their pension products.
And now, how much can I deduct on my income tax return?
As with the limits on contributions, we can deduct in our income statement up to a maximum of € 2,000 for our individual contributions (or 30% of the net income from work or economic activities).
This amount that we can deduct can be increased by another € 8,000, if such amount comes from business contributions to the Mutual Society or employment plan.
Can I redeem my benefit if I am affected by an ERTE (temporary lay off)?
The deadline for applying for the benefit due to being unemployed as a result of an ERTE derived from the Covid19 health crisis, has not been in force since September 14. Therefore, it is no longer possible to collect this exceptional case, which was allowed in the RDL. 11/2020 of March 31 for being requested in the six months after the declaration of the state of alarm, occurred on March 14.
What is a pension plan?
A pension plan is a savings product, which will allow you to have a capital or an income at the time of your retirement or in case of disability, and in case of death, your beneficiaries can have it.
In addition, pension plans allow you to obtain the maximum tax savings in your income tax, as they allow you to deduct the contributions made, thus deferring the payment of the tax at the time of collecting the benefit.
Why do you need a pension plan?
To maintain the current standard of living, it is necessary to complement the Social Security public pension, since the substitution rate is everyday decreasing (the difference between the last salary and the pension is increasing).
What are the advantages of a pension plan?
It is an optimal product from both a financial-fiscal point of view, as in addition to the profitability accumulated over the years, we must add the tax relief that the contributions mean. Moreover, it allows for consistent and periodic savings to cover any future risk.
Can you contract several individual pension plans at the same time?
You can hire as many personal plans as you want. You just have to take into account that the annual contributions of the participant to all of them must not exceed the maximum allowed by law in total.
I have a pension plan in my bank, can I transfer the consolidated rights to Loreto Mutua? What is the cost?
Yes, you can transfer your personal pension plan, from your bank/entity, to the Loreto Óptima Individual Plan without any economic or fiscal cost.
What are the advantages of periodic contributions? Can they be complemented?
It supposes a gradual effort, since the ideal thing is to treat said contributions as if they were a recurrent expense (electricity, water,...).
When a contribution is made, you are purchasing shares of the plan at that time. Therefore, when you are making periodic contributions, participations are being purchased at an average price throughout the whole year, consequently reducing troubles and risks.
You can always complete the periodic contributions with other extraordinary ones.
When I will be able to collect my pension plan?
When any of the contingencies covered by the plan, retirement, disability, great disability and death are met. In addition, the Regulations also contemplate the possibility of anticipating the collection of the benefit in the following circumstances: After a L.F.A.P (labour force adjustment plan), after an exceptional settlement for unemployment and finally, for over 60 years, with the specifications set by the Law.
Likewise, they may have as of January 1, 2025, the amount of their rights corresponding to contributions with at least ten years old.
Who collects my money in case I die?
In the event of death, the collection of your savings in Loreto Optima will be for the people you have designated as beneficiaries in the Pension Plan.
The designation of beneficiaries that you have completed prevails over the testamentary provisions, unless the will is subsequent to the designation in Loreto Mutua and is expressly specified in it, the people and distribution among them of the consolidated rights of your Plan.
Appointing beneficiaries in the Plan, avoids misunderstandings and facilitates procedures, by not having to present all the documentation of the will.
By entering your Private Area on our website, you can at any time check your beneficiaries and the percentages assigned, make a new designation or designate them for the first time.
The benefits generated by death are also taxed as income from work in the beneficiary's personal income tax but are not subject to Inheritance and Donations Tax.
How can I collect my pension plan?
In the form of capital: All the accumulated consolidated rights, at one time are collected
In the form of uninsured temporary income: Monthly payments of the desired amount are received, until all the consolidated rights are exhausted. At any time, a total settlement of the outstanding balance or part of it can be made.
In mixed form: One part is charged in the form of capital and another part in the form of unsecured temporary income.
In the form of insured temporary income: In the form of a guaranteed temporary income: It consists of hiring a fixed income for a specified period of time.
