The main difference between a pension plan and a EPSV is that it can only be tried in the Basque country and the money can be recovered within 10 years.

Both pension plans and Social Security Entities EPSV formulas are long-term savings to accumulate capital intended to supplement the retirement benefit of the public system . The two work very similar but with nuances that make them different.

Operation of pension plans and EPSV

The saver (investor) who hires either formulas undertakes periodic payments (contributions) to build up a long-term capital (vested rights) to receive money (benefits) at the time of retirement. The contributions are used to purchase securities in order to earn a return that increases the capital contributed. These investments are made by a management company and a depository custody, both supervised by a supervisory committee.

Types of pension plans and EPSV

There are three types of plans, both pension and EPSV: job, partner or individual, depending on who makes contributions and who is the beneficiary. Employment schemes are those in which the company makes contributions on behalf of their employees. The plans associated promoter is a partnership, syndicate or group and the beneficiaries are members. Individual plans are those that can hire anyone with an entity to complete your pension , your spouse or a family member with disabilities, in the latter two cases, provided that certain requirements.

pension-plans

Pension plans and individual EPSV

In the pension plans and individual EPSV the participant will make contributions that accumulate and are generating income, increased capital for when it comes time to remove it. To recover the money accumulated, called vested rights, there must be some of the contingencies provided:

* Retirement
* Disability,
* Long-term unemployment (longer than one year and not receiving benefits)
* Serious illness (illness that incapacitates own usual activity for a period exceeding three months or illness of a relative in the first degree that reduces disposable income)
* Death.

In all these cases the beneficiary is the participant who made the contributions or he has determined (spouse or disabled) unless death occurs, in which case the bound perceive the heirs of the beneficiary of the plan. The participant decides what contribution do at all times, or even not make contributions for a time, although entities may establish an annual minimum. If you are not satisfied with the results you can move their vested rights to another pension plan or EPSV the same or a different entity at any time.

Taxation of contributions to pension plans and EPSV

The contributions of each year to the pension plans and enable EPSV save taxes in the tax declaration of the same year, with a maximum set that varies by age of the participant. The maximum deduction is different depending on whether it is a pension plan or a EPSV. Time to enjoy the money saved, perceptions are also taxed fiscally. Benefits should be included in the tax declaration of both the beneficiary and his heirs, upon the death of it. The inheritance and gift tax does not apply in this case.

Different tax treatment for benefits

The tax treatment is different if the bound is received as income (lease payment as a salary or a pension) or in the form of capital (all at once or spend much time left between various perceptions).When the benefit is in the form of income, should be included in the income tax base and taxed as perform more work without any tax advantage, both pension plans and in the EPSV.

When the benefit is in the form of capital, 100% is included in the income tax base in the case of a pension plan, without any tax advantage. Instead, recipients of EPSV only declare 60% of the first time perceived. The following benefits in a lump sum from a EPSV taxed at 100% unless five years have elapsed since the last collection for Bizkaia and Gipuzkoa, and 10 years in the case of Alava, provided that the conditions of permanence and periodicity contributions.

Main differences of EPSV

In addition to tax benefits, the plans are characterized EPSV can be contracted only in the Basque Country by persons or companies with tax residence in any of its provinces. But the most important difference affects liquidity. The beneficiary can recover the accumulated savings in a EPSV, or part of it, from the tenth year since its establishment to attend without any of the contingencies provided retirement, death, unemployment, disability or illness. Although in this case the investment will not fulfill its main objective to supplement retirement.