Employment System Pensions
Social forecasting is a Human Resources policy tool which is highly valued by workers and brings in the greatest social benefits, as it contributes to meeting employee expectations concerning problems which they might encounter during their working life and once they have retired. Setting up pension schemes responds to this need providing the most suitable instrument to meet these social targets and a motivating factor for employees.
The current situation and foreseeable changes in the future of the state pension system recommend taking measures as soon as possible to compensate for our loss of income at retirement.
Pension schemes are an appropriate instrument to tackle this situation, as this type of saving scheme offsets the taxation load to when the payments start to be made after retirement. The fact that they are tax-free during the contribution period increases the quantity of resources invested, which over long periods of time becomes a considerable increase in profitability.
In addition to the indubitable social advantages, pension schemes have interesting economic benefits.
Through these schemes, it is possible to increase an employee’s net salary without imposing a greater salary cost for the company. This is a retribution system where the quantities paid by the company:
- Do not increase the Social Security contribution bases.
- Can be deducted from Business Tax.
- Bring a rebate for Business Tax.
- For the employee, they can be deducted from income tax.
The promoter can contribute to the scheme for their employees or the participant can contribute directly. This makes it possible, among other advantages, to make the double annual contribution to pension schemes, as the maximum contribution limit permitted by legislation of 8000€ operates independently for contributions made by the promoter and the participant.
One of the reasons why pensions schemes arouse so much interest, compared to other social forecasting instruments, is because contributions made at any time are owned directly by the participant.
Running the pension scheme requires supervision from representatives for the promoter and the participants, through the control commission. This control, along with the legal requirements for management and periodic obligations to provide information to participants, make pension schemes one of the safest and most transparent products.