We start 2023 and, beyond the best wishes for everyone this year, from Loreto, we want to provide you the information on the legislative developments corresponding to the new limits of contributions to pension products, as well as the tax benefits that affect both companies and mutual society members and participants.
Regarding the Mutual Society and the pension plans managed by Loreto Mutua, with effect from January 1, 2023, the following legal and fiscal limits apply:
That is, the maximum annual contributions for 2023 will be adapted as follows:
1) The general individual limit, for everyone, will remain 1,500 euros per year. Keep in mind that in the event that you are a participant in Loreto Optima, PPI, this will be the maximum amount you can contribute.
2) If you are a mutual society member or participant in Loreto Empresas, PPE, this limit may be increased by 8,500 euros per year, if:
a) They come from contributions from the company, or if
b) They come from contributions of the worker to the same welfare instrument, but for an amount equal to or less than the result of multiplying the employer contribution by a coefficient:
- If the annual business contribution is equal to or less than 500 euros, the maximum contribution will be the result of multiplying the business contribution x 2.5.
- If the annual business contribution is between 500.01 euros and 1,500 euros, the maximum contribution will be 1,250 euros, plus the result of multiplying x 0.25 the difference between the business contribution minus 500 euros.
- If the business contribution is greater than 1,500 euros, the maximum contribution will be the result of multiplying the business contribution x 1.
- When the worker obtains full annual income from his job exceeding 60,000 euros, from the company that makes the contribution (the company must communicate this condition), the maximum contribution will be the result of multiplying x1.
It continues to be maintained that the amounts contributed by the company that derive from a decision of the worker (flexible remuneration), will be considered for these purposes as contributions of the worker.
The mutual society members and participants who are already part of Loreto, you can consult in your private area, the contributions made in the year to your products and the options to be able to increase them.
2. Taxation of contributions for the mutual society member or participant
Whether the contributions of a business or individual nature, they have a reduction in the general tax base of the Personal Income Tax IRPF, which the worker may apply with the limits indicated above, provided that they do not exceed 30% of the net income from work / economic activities (the lower of these amounts will be applied). This means direct savings for the worker.
3. Benefits for the company
- Deduction in the corporate tax
A new deduction of the full amount of the tax, which is 10% of the business contribution, is included. In the case of employer contributions in favor of workers with gross annual remuneration of less than € 27,000, the deduction is 10% of the entire business contribution.
In the case of workers with gross annual remuneration equal to or greater than € 27,000, the deduction is applied for the proportional part of contributions corresponding to the first 27,000 euros.
- Reductions in employer’s contributions
The employer’s contribution to Social Security can be reduced for common contingencies, exclusively for the increase in the contribution derived directly from the employer’s contribution to the pension plan. The maximum reduction is the one that results from multiplying by thirteen the quota resulting from applying to the minimum daily contribution base of group 8 of the General Social Security Regime for common contingencies, the general contribution rate borne by the company for the coverage of said contingencies.
These legislative amendments seek to increase the number of workers who have welfare systems for their future, such as those of Loreto Mutua, especially through sectorial or business collective negotiation. To itself, extend savings in small and medium-sized enterprises, and accommodate the self-employed who, until now, could only have pension plans of the individual system.
From Loreto we remain available to our mutual society members, participants, protective companies and companies of any sector to expand this information or clarify any doubts that may arise.
If you are interested in establishing an employment plan for your workers (PPE) or want to join the mutual society as a protective company, do not hesitate to contact us.
We continue one more year supporting our protective companies and our customers on the road to a good retirement.
Madrid, 16 January 2023
Loreto Mutua MPS