Law 12/2022, of June 30, regulation for the promotion of employment pension plans, introduced a series of significant changes in the Social Security system. This law modified the Royal Legislative Decree 8/2015, of October 30, which approved the consolidated text of the General Social Security Law (LGSS), incorporating a new forty-seventh additional provision in the aforementioned LGSS, on quota reductions of business contributions to employment plans.
As of February 1, 2024 Construction companies will be required to make monthly contributions to the sector's pension plan, which will be managed by VidaCaixa, Caixabank's insurer. To register, companies must access the VidaCaixa portal and register as users through a platform specifically created for this purpose.
How is the reduction applied?
The quota reductions will be applied by the General Treasury of Social Security at the request of the company, after communication of the identification of the workers, the settlement period and the amount of the business contributions actually made. For the quota reduction to be applicable, these communications must be submitted, in accordance with the provisions of article 147.3, before requesting the calculation of the corresponding quota settlement.
The companies will have a period of three months, that is, until April 30 to make the contributions corresponding to the years 2022, 2023 and January 2024. Starting in February 2024, contributions will be monthly and will be paid in arrears.
The pension plan will cover contingencies for retirement, permanent disability and death. The fund may also be received in the case of long-term unemployed.
The contribution to the pension plan must be reflected on the workers' payroll as salary in kind. The company may deduct 10% of the mandatory business contributions of workers with annual gross remuneration of less than €27.000 from the full amount of Corporate Tax.
Companies can make a maximum contribution of 8.500 euros per worker, while these can also complement that amount with another 1.500 euros. These contributions are not subject to personal income tax. and workers cannot choose to waive their contributions to the plan to receive the equivalent in salary.
Workers who, as of February 1, 2024, receive annual remuneration higher than the minimum wage established by the collective agreement for their professional category plus the amount of contributions to the plan, must not make contributions.
Sectoral pension plans
Sector pension plans are an interesting initiative that seeks to address the specific needs of workers in certain industries. In the case of the construction sector, this measure can have a significant impact on the financial security of employees.
Positive aspects:
- Specialization: By being specific to a sector, these plans can be better adapted to the characteristics and risks of construction. This could translate into greater efficiency in the management of funds and greater protection for workers.
- Mandatory: The obligation of companies to make monthly contributions guarantees that workers are covered. This is especially relevant in a sector such as construction, where job stability can be variable.
- Fiscal benefits: The possibility of deducting a percentage of business contributions in Corporate Tax can encourage companies to actively participate in these plans.
Challenges:
- Awareness: It is essential that both companies and workers understand the importance of these plans and adhere to them. Lack of information could be an obstacle.
- Proper management: Correct administration of funds is crucial. Companies must ensure that contributions are made in a timely manner and that workers are informed about their situation.
- Equity: It is important that the plans are equitable and benefit all workers equally, regardless of their seniority or position in the company.
Sector pension plans can be a valuable tool to ensure the financial security of construction workers. However, its success will depend on effective implementation and active collaboration between companies, workers and managing entities.
In addition to the construction sector, several other sectors are considering or have already implemented sector pension plans for their employees. Some of these sectors include:
- Metal sector: Small workshops and companies within the metal sector are evaluating the possibility of contributing to pension plans for their workers. This could affect around 250.000 people.
- Travel agencies: Travel agencies employ 60.000 people and are also considering the implementation of sectoral pension plans.
- Insurance brokerages: This sector is also being targeted to establish mandatory pension plans for its employees.
In summary, the trend towards sectoral pension plans is spreading to various work areas, which also increases the administrative and management burden of companies and professionals. These plans seek to improve the financial security of workers and complement public pensions in the future.
Merce Sanchez Rodriguez
TOMARIAL Labor Area Collaborator
