The pension fund is a supplementary pension form , which can be joined voluntarily, on a collective and individual basis.
In this article we will find out:
· What are pension funds
· How a pension fund works
· Pension fund benefits
· Tax advantages of the pension fund
· Supplementary pension and early retirement
What are pension funds
Pension funds are complementary pension forms.
They have the purpose of collecting the contributions of the subjects who adhere to them and invest them, and then disburse , at the time of retirement, an annuity that supplements the pension allowance from compulsory social security, or, in the cases provided for, a capital for their own projects once closed working life.
Closed pension funds
Closed-end or negotiated pension funds are set up as part of collective , national or company bargaining .
The so-called territorial pension funds also belong to this type, ie established on the basis of agreements between representatives of employers and workers belonging to a specific territory.
Some sectors have a category fund (eg metalworkers). The worker who joins it also benefits from the employer's contribution.
Open pension funds
Open pension funds are set up by banks, insurance companies, asset management companies (SGR) and stock brokerage companies (SIM).
Open pension funds can collect subscriptions on an individual and collective basis.
Individual pension plans (PIP)
PIPs are complementary pension forms established by insurance companies . PIPs can only collect memberships on an individual basis.
How a pension fund works
The pension fund works with capitalization : the contributions paid are destined to an individual account in the name of the member, to which the returns obtained over the years are also added.
Those who subscribe to the fund can choose between different lines of investment or sub-fund, depending on their risk profile and the time horizon available, as there is a difference between joining a 20-year rather than a 50-year fund.
The sub-funds are classified as follows, with an increasing risk profile :
monetary , which invest, for example in bonds and short-term government securities;
bond , pure and mixed. Mixed companies invest mainly in bonds but not exclusively;
balanced , they generally invest half in stocks and the other half in bonds;
equity .
As we have seen, those who adhere to a category pension fund obtain, in addition to their own, the contribution of the employer.
We remind you that the employer can also pay contributions in PIPs (Individual Pension Plans) and in open pension funds.
Pension fund and severance pay
In the case of employees in the private sector, tacit membership is also envisaged for the transfer of the TFR to the pension fund of their category.
It is a mechanism that is triggered through silent consent in the event that the worker, after 6 months from hiring , does not choose how to allocate the severance pay, between the two options:
keep it in the company;
allocate it to supplementary pensions .
This is for the new hires.
It should be noted that the worker can, at any time, decide to join the pension fund , by filling in the relevant form and starting the payments. In the latter case, the severance indemnity accrued up to the moment of the transition to the pension fund remains in the company, while the subsequent provisions go to the supplementary pension fund.
Pension fund benefits
Once the legal requirements for retirement have been met, the fund can disburse its benefits, based on the capital accumulated over the years, including returns , and net of taxes and expenses .
The service can be provided in different ways :
immediate life annuity , therefore with a monthly allowance coming from the supplementary pension that is added to that received from the compulsory public pension. The supplementary pension can provide for reversibility , as for the public pension, in the event of the retiree's death;
50% of life annuity and 50% of capital , therefore you get half of the capital accrued in a single solution and the other half in the form of a supplementary pension;
100% capital , in the event that the annuity that would be obtained was lower than a certain amount parameterised to the INPS social allowance.
Anticipation
During the accumulation period, before retirement, therefore, and under certain conditions, it is possible to request advances :
at any time for documented extraordinary healthcare expenses , connected to interventions and therapies resulting from very serious situations relating to the member, spouse and children (maximum 75% of the accrued amount);
after 8 years from joining for documented purchase or renovation costs of the first home , for the member or his / her children (maximum 75% of the accrued amount);
after 8 years from joining for personal reasons (maximum 30% of the amount accrued).
Redemption
It is also possible to request and obtain the redemption of the capital accrued up to that moment.
The conditions change according to the type of adhesion to the fund:
redemption with membership on an individual basis . It is possible to obtain the 50% redemption if the person has not worked for over a year, and total if he has not worked for at least 4 years;
redemption with membership on a collective basis . It is possible to obtain the redemption under the conditions already mentioned, but also when the person stops working or changes company.
Tax advantages of the pension fund
Those who join a pension fund, obtain a series of tax advantages , in force since January 1, 2007, compared to other forms of investment:
contribution phase. The contributions paid can be deducted in the tax return , with a maximum annual ceiling of € 5,164.57;
management phase. The returns accrued during the management of the individual account are subject to a favorable tax rate at a rate of 12.5% on the returns from Government Bonds, and 20% on the returns from other uses (shares, bonds, etc.). The minimum tax applied to all other types of financial returns is 26%;
performance phase. Annuity or capital received at the end of the working life, are taxed at a rate of 15% , which is reduced by 0.30% per year, for each year of stay in the Pension Fund beyond the fifteenth, up to a minimum rate 9%.
Supplementary pension and early retirement
We close with a final benefit deriving from the supplementary pension: the possibility of anticipating the moment of retirement over time without waiting to accrue the requirements for the old-age pension.
In fact, there is the opportunity to request, before the effective moment of retirement, a temporary annuity called RITA (Anticipated Temporary Supplementary Annuity) .
This allows you to have a monthly income before reaching retirement proper.
The requirements for accessing RITA are participation in a supplementary pension scheme for at least 5 years, and, alternatively:
cessation of working activity , with maturity of the age for the old age pension in the compulsory membership scheme within the following 5 years, and overall contribution requirement of at least 20 years in the compulsory membership schemes;
unemployed for a period of time exceeding 24 months, with maturity of the age for the old age pension in the compulsory membership scheme within the following 10 years.
You can decide to convert to RITA :
all the capital accumulated in the Pension Fund;
only a part of the capital, in order to then be able to request the supplementary pension with the remaining one.
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