- The maximum commission drops by 30%; which benefits 4.5 million participants with savings of 121 million euros per year
- The rights accumulated as of December 31 of this year and as of January 1, 2015 may be recovered after 10 years.
The Council of Ministers has approved a series of regulations that update the legal framework of the Pension Plans and Funds, of the insurance sector and of insurance mediation. The main measures consist of lowering the commissions paid by the participants in the Pension Plans and Funds and increasing the transparency of the information they receive. These improvements are complemented by others included in the personal income tax 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 by sex, improves the actuarial calculation of death provisions and clarifies aspects related to Tax Lease.
The Royal Decree (RD) that modifies the regulations for Pension Plans and Funds, among other regulations in the same field, reduces the maximum legal management and deposit fees to adapt them to the situation of 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 position account of the pension plan, 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 fee is reduced from 0.5% to 0.25% on the pension plan position account. The new limits will take effect two months after the publication of the rule in the BOE.
The RD also promotes transparency in the Pension Plans by expanding the information that the participant is required to receive before hiring an individual pension plan through the key data document. The detail of all the investments of the Pension Funds will be added at the end of each year and the profitability generated by the fund in the last 20 years will also be reported. Access to information should also be provided 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 external, and that the investment risk is of the participants and beneficiaries.
The new Personal Income Tax (IRPF) that the Government has also approved for submission to the Cortes, includes a new assumption of liquidity for the participants in the Pension Plans and Funds, together with those that currently exist for illness severe and long-term unemployment. In the Individual and Associated pension plans, the consolidated rights corresponding to contributions made from January 1, 2015 will be available once they are 10 years old. The economic rights that the participant had as of December 31, 2014 will also be available once 10 years have elapsed. This implies that in any case the contributions and rights cannot be made liquid before January 1, 2025. The same will be established in the Employment pension plans, provided that it is provided in the specifications and the commitment allows it. Regulatory conditions, requirements and limits will be collected to make liquidity effective.
This liquidity regime will be applied to Individual, Associated and Employment pension plans. And also to the insured pension plans, corporate social welfare plans and insurance contracts signed with Mutualidades de Previsión Social 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 policy conditions and the commitment allows it. This regime does not apply to group insurance that implements pension commitments, as its financial and fiscal nature is different from the previous ones.
The economic rights obtained by application of this assumption of liquidity are taxed as benefits, that is, in the beneficiary's personal income tax as income from work, integrating in the general base in its entirety. Benefits in the form of capital corresponding to contributions made before 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 reinforce transparency, product comparison 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 equates the premiums the policyholder pays with the amount of benefits expected to be received. The insurance company has to notify the client of this expected profitability before the conclusion of the contract. This obligation has already been established in the consolidated text of the Law on the regulation and supervision of private insurance. Now, in this same sense, the Regulation of Supervision and Regulation of Private Insurance is modified.
Non-discrimination by sex in insurance contracts
By virtue of 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, for the effective equality of women and men and the revised text of the Law on the organization and supervision of private insurance have been amended. . Now, in this same sense, the Regulation of Supervision and Regulation of Private Insurance is modified.
This modification will not have any impact on the amount of the premiums, since since December 2012 they do not apply discrimination by sex.
Modification in the calculation of funeral insurance provisions
The Royal Decree improves the actuarial calculation of death forecasts. Thus, a method of calculating the death provision that was born in 1998 is repealed, as a form of calculation for policies prior to the entry into force of the Regulation. Until now, said provision was established as 7.5% of annual premiums, without taking into account the age of the insured. Experience has shown that this form of calculation was insufficient to reflect the obligations assumed by insurance entities, especially in those cases in which the insured has contracted death insurance at an advanced age. The Royal Decree proposes the use of an actuarial technique granting 20 years of adaptation period to regularize the deficit.
Investment in Tax Lease
The so-called Tax Lease is an investment in the financing of the construction and acquisition of ships that is carried out through an Economic Interest Group (IEA), that is, a set of partners that are grouped together with the purpose, in this case of acquiring the ship. The RD expressly clarifies that the participation by an insurance entity in this type of IEA is suitable for the coverage of technical provisions of insurers, allowing greater diversification of the asset portfolios of insurance companies and promoting investment in the industry. naval, considered strategic.
Approval of the submission date of the annual information of the mediators
April 30 is established as the date on which the mediators must submit the annual information (statistical accounting documentation) to the supervisory body. This date was previously July 10. This modification is justified by the need for the DGSFP to have the necessary information for the exercise of its functions, as the administrative burden of the obligation to remit semi-annual documentation has been removed. In addition, it is possible to unify the date of submission of the information with the Autonomous Communities that have assumed supervisory powers regarding mediation.