Tuesday, February 27

Checkmate pension plans and sicavs

The Government’s fiscal attack against individual pension plans and variable capital investment companies (sicavs) you are endangering your survival and many say that this is their goal.

First, the Minister of Social Security, Jose Luis Escriva, focused on individual pension plans, which he considers expensive and inefficient, and in 2021 reduced from 8,000 to 2,000 euros the limit of contributions to these plans with the right to relief in personal income tax, which meant a drop of 75 percent.

This year the General State Budgets (PGE) include another reduction of these limits from 2,000 to 1,500 euros. A new 25 percent decrease, with which in two years the limits have been reduced by 6,500 euros.

Contributions are reduced by 41 percent

And the first consequences have already been noted. According to data from the Association of Collective Investment Institutions and Pension Funds (Inverco), the “drastic” decrease in the limit of contributions last year reduced the volume of gross contributions to individual pension plans by 41 percent, reaching 2,539 million euros, far removed from the 4,314 million achieved in 2020.

It has been the first time in the historical series in which the contributions were less than the benefits, specifically 92 million less.

For the benefit of the macro fund

“If these measures continue the disappearance of individual pension plans will take place in the medium term or a large reduction in their assets, which is the objective that the Government has set for itself so that SMEs and the self-employed contribute to the employment pension macro fund that it is designing,” he says. Elizabeth Casares, general secretary of the Organization of Pension Consultants (Ocopen).

Too Miguel Angel Menendez, director of the Wealth area of ​​Mercer Spain, believes that this is the goal that the Minister of Social Security intends to achieve, “to put an end to individual savings in pension plans to encourage company plans”.

He considers that “it is very likely that he will succeed”, since the tax punishment will be joined by the liquidity windows approved in 2015 that will allow, as of 2025, to freely redeem individual pension plans ten years old and the returns generated.

“This will most likely cause the disappearance of the individual plans or, at least, their reduction in assets. This could in turn cause an increase in the management and administration expenses of the managers to maintain the same level of services, which that would end up with these products,” predicts Menéndez.

Too Angel Martinez-Aldama, president of Inverco, considers that “if the Government does not want to eliminate the individual plans, it will not be long. It has already left them very limited”.

More than eight million affected

The cut in tax incentives will harm 7.5 million participants in individual pension plans and almost a million savers in insured pension plans (PPA), they point out from Inverco.

These plans closed 2021 with a volume of assets of 89,323 million euros and an average annual return of 2.9 percent.

Sicavs, the other victims

The variable capital investment companies have been the other affected by the Government’s tax changes, after approving the law on measures to prevent and combat tax fraud that tightens the requirements for them to pay 1 percent in corporate tax, one of its greatest attractions.

As of this year, only those sicavs that have at least one hundred partners with an investment of at least 2,500 euros each.

A fact that has not occurred until now, since 80 percent were controlled by a majority shareholder, a family or a company and the rest, until completing the required 100 partners, were ‘mariachis’, straw investors who were not It required a minimal investment.

Experts estimate that the new regulations will end up with about 80 percent of the 2,300 sicavs open in Spain, which managed assets of 28,767 million euros at the end of November.

«The vast majority will close, since now there are only 30 that have more than 500 shareholders, who are of a transferable nature and with an open vocation. The rest have a main shareholder, so they are bound to dissolve and liquidate, “he predicts. Enrique Cabanas, director of the Tressis agent network.

investment tax

The government’s appetite for collection has gone further. It has also targeted investment in the stock market after the implementation of the tax on financial transactions, known as tasa Tobin.

It is a tax on investment that came into force in February 2021 and is levied with a 0.2 percent transactions for the sale of shares in Spanish companies with a market capitalization of more than 1,000 million euros.

It covers 56 companies, all listed on the IBEX 35, with the exception of Arcelormittal, for being of foreign nationality, and another 22 on the Continuous Market.

The numbers don’t come out

But on this occasion the Ministry of Finance has not worked out the accounts, as we already reported in Finanzas.com. Its objective was to collect 850 million euros with this tax and, according to data from the Tax Agency, the Treasury only entered 288 million euros until November, which represents 33.8 percent of what was planned for the year as a whole.

They attribute this deviation to calculation “errors”, according to Jesus Gascon, general director of the State Tax Administration Agency, who has recognized that the estimates “were excessive”, although he is convinced that the income derived from the tax will increase.