Group Retirement Plan
Group Retirement Plan
The Group Retirement Plan is a collective life-savings insurance designed for companies who wish to formalise pension commitments for all the staff or for different groups of employees, achieving more loyalty and a better relationship of the same with the company.
The Group Retirment Plan allows deferred remuneration plans to be instrumented with better tax advantages for the group. Its characteristics make it an optimum instrument for relating the staff to the company, in that it allows the collection of benefits to be conditioned according to the determining factors established by the company (seniority in the company, retirement in the same, etc.)
The Group Retirement Plan makes identification with the business objectives and the concern of the staff with regard to retirement, compatible. Additionally, the accumulated capital does not form part of the company balance sheet, but remains unconnected to the assets and therefore, it cannot be seized to cover possible insolvencies.
It enables assured capital for death or disability to be included in the same product.
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The retirement plan is incredibly flexible with regard to the frequency and amount of the contributions. Additionally, different levels of contributions can be established for each of the insured. There is no annual contribution limit.
The Group Retirement Plan can be redeemed by the company under the circumstances established in legislation:
- For the purpose of maintaining an adequate coverage of commitments for pensions
- If the employee resigns from the company.
- In order to integrate the pension commitments in another insurance contract or in a pension plan
In any case, the employee's rights over the accumulated capital in the event of resigning from the company will be in accordance with the agreement established between the two parties.
The employee will also have access to the accumulated capital in the event of severe illness or long-term unemployment.
Without penalties or surcharges:
All contributions made by the company are destined to accumulation to reach the predicted capital on retirement. In the event of redemption all the premiums paid and its capitalisation will be acknowledged, without any type of penalty
The plan includes a guaranteed additional capital in the event of death or total and permanent disability of the insured, for the amount determined by the company
The contributions made to the Group Retirement Plan are invested according to the safety, profitability and diversification criteria. The return generated by these investments translates into the profitability obtained by the Group Retirement Plan.
BanSabadell Vida offers a wide range of options so that your company can choose the investment policy that best adapts to its objectives and needs.
There are different investment alternatives, according to the volume of the contributions and characteristics of the group:
- constitute an exclusive portfolio for the company
- join an already existing portfolio
- choose a unit linked system in which the contributions are distributed between the different investment options offered by BanSabadell Vida or guarantee a return that will be revised periodically
For the company:
When the manager receives the payment the company will be able to deduct from tax all the contributions made from the beginning. The company must not pay for the for the yield that is generated by the insurance, except if makes a redemption, in which case it will pay for all yield generated integrating it into the taxable base of the Company Tax.
The contributions made by the company during the whole accumulation period do not have any tax effect for managers (neither are they considered payment in kind). Tax treatment for managers when receiving payment (in the form of a lump sum) presents excellent advantages:
There is a transitory regime which maintains the reduction of 40% for payments in the form of capital if the policy is earlier than 20/01/06 and at the moment of contingency, the contributions have an antiquity of over 2 years.
- For retirement of permanent disability, payment received will be taxed as income from work.
- In the event of death, the beneficiaries designated by the insured will pay for the death tax and gift tax, also applying from the general reductions according to the degree of kinship, an additional deduction of 9,145,49€ due to the life insurance.