- The maximum commission falls by 30%; which benefits 4.5 million participants with savings of 121 million euros annually
- The rights accrued as of December 31 of this year and as of January 1, 2015 may be recovered at 10 years
The Council of Ministers has approved a series of regulations that update the legal framework of the Pension Plans and Funds, the insurance sector and insurance mediation. The main measures consist of lowering the fees paid by the participants of the Pension Plans and Funds and increasing the transparency in the information they receive. These improvements are completed with others included in the IRPF reform, such as the possibility of a new assumption of liquidity at 10 years. In relation to insurance, the standard harmonizes the calculation of the expected return on life insurance, introduces non-discrimination based on sex, improves the actuarial calculation of death provisions and clarifies aspects related to Tax Lease.
The Royal Decree (RD) that modifies the regulations of Pension Plans and Funds, among other regulations of the same scope, reduces the maximum legal fees for management and deposit to adapt them to the situation of the current, national and international financial markets. This measure means reducing the maximum commission by 30% (from 2.5% to 1.75%), which will benefit 4.5 million participants with savings of 121 million euros per year. Specifically, the maximum management fee is reduced from 2% to 1.5% on the pension plan position account, with the possibility of replacing said percentage with 1.2% of the value of the position account plus the 9% of the income statement. The maximum deposit commission is reduced from 0.5% to 0.25% on the pension plan position account. The new limits will enter into force two months after the publication of the standard in the BOE.
The DR also promotes transparency in the Pension Plans by expanding the information that the participant receives prescriptively before hiring an individual pension plan through the fundamental data document. The detail of all the investments of the Pension Funds will be added at the end of each fiscal year and the profitability generated by the fund in the last 20 years will also be reported. Access to information should also be facilitated through the website of the manager or its group. It will improve the prior communication of risks to the participant so that they know in advance, among other matters, that the pension plans are illiquid (or with limited liquidity), do not guarantee profitability, except for the external one, and that the investment risk is of the participants and beneficiaries.
The new Income Tax for Individuals (Personal Income Tax), which the Government has also approved for its referral to the Courts, includes a new liquidity assumption for the participants of the Pension Plans and Funds, along with the existing sickness serious and long-term unemployment. In the Individual and Associated pension plans, the consolidated rights corresponding to contributions made as of January 1, 2015 may be available once they are 10 years old. It will also be possible to have the economic rights that the participant had as of December 31, 2014 once 10 years have elapsed. This implies that in any case the contributions and rights may not be made liquid before January 1, 2025. In the Employment pension plans the same will be established, provided that it is provided in the specifications and the commitment allows it. Regulations will include conditions, requirements and limits to make liquidity effective.
This liquidity regime will apply to Individual, Associate and Employment pension plans. And also to the insured pension plans, corporate social security plans and the insurance contracts signed with Social Security Mutuals that reduce the income tax base, according to article 51 of Law 35/2006. In the case of corporate social welfare plans, it is required that the assumption be provided in the condition of the policy and allowed by the commitment. This scheme does not apply to collective insurance that implements pension commitments, as its financial and fiscal nature is different from the previous ones.
The economic rights obtained by applying this liquidity assumption are taxed as benefits, that is, in the beneficiary's personal income tax as income from work, integrating into the general base as a whole. Benefits in the form of capital corresponding to contributions made prior to January 1, 2006, which will have a 40% reduction, are excluded.
Other measures related to the insurance sector approved by the Council of Ministers are the following:
Harmonization in the information on the expected profitability of insurance
Also, to strengthen transparency, the comparison of products will be facilitated by harmonizing the method of calculating the expected profitability of the operation. The expected return will be calculated as the interest rate that equals the premiums that the policyholder pays with the amount of benefits expected to be received. The insurer must notify the customer of this expected return before the contract is concluded. This obligation has already been established in the consolidated text of the Law on the management and supervision of private insurance. Now the Regulation of Regulation and Supervision of Private Insurance is modified.
Non-discrimination based on sex in insurance contracts
Under the Judgment of the Court of Justice of the European Union of March 1, 2011, in Case C 236/09 (Test-Achats Judgment), as of December 21, 2012 there can be no differences in premiums and benefits between men and women. This criterion has required adapting national regulations, so that LO 3/2007, of March 22, has already been modified for the effective equality of women and men and the consolidated text of the Law on the management and supervision of private insurance . The Regulation for the Regulation and Supervision of Private Insurance is now modified.
This modification will not have any impact on the amount of premiums, since since December 2012 they do not apply discrimination based on sex.
Modification in the calculation of provisions for death insurance
The Royal Decree improves the actuarial calculation of death forecasts. This repeals a method of calculating the provision of deaths that was born in 1998, as a form of calculation for policies prior to the entry into force of the Regulation. Until now this provision was established as 7.5% of annual premiums, regardless of the insured's age. Experience has shown that this form of calculation was insufficient to reflect the obligations assumed by insurance entities, especially in those cases where the insured has contracted death insurance at an advanced age. The Royal Decree proposes the use of actuarial technique granting 20 years of adaptation period for the regularization of the deficit.
Tax Lease Investment
The one known as Tax Lease is an investment in the financing of the construction and acquisition of ships that is carried out through a Group of Economic Interest (IEA), that is, a set of partners that are grouped together with the purpose, in this case, to acquire the ship. The RD expressly clarifies that the participation by an insurer in this type of IEA is suitable for the coverage of technical provisions of the insurers, allowing a greater diversification of the asset portfolios of the insurers and promoting investment in the industry Naval, considered strategic.
Approval of the date of submission of the annual information of the mediators
April 30 is established as the date on which mediators must submit annual information (accounting statistical documentation) to the supervisory body. This date was July 10. This modification is justified by the need for the DGSFP to have the necessary information for the exercise of its functions, since the administrative burden of the obligation to submit the semiannual documentation has been removed. It also manages to unify the date of submission of the information with the Autonomous Communities that have assumed supervisory powers regarding mediation.