Friday, August 12

The keys to the macro employment pension fund designed by Escrivá


The Ministry of Social Security has sent the employers and the unions the draft of the bill with which it intends to promote business social security and in which it establishes the bases of what will be the public promotion pension funds (FPEPP) and the simplified occupational pension plans (PES) that will make up the macro-fund for employment pensions promoted by the Government.

This super fund devised by the Minister of Social Security, Jose Luis EscriváIt is open and privately managed, and will be developed within the framework of collective bargaining.

Ministry sources hope that the parliamentary processing of this law will conclude in the second quarter of 2022. Once approved, public employment pension funds will be established and a public tender of private entities will be held to award their management. This process could take until early 2023.

For now, the Ministry of Social Security has already taken the first steps in preparing the draft that it will have to negotiate with the social agents and whose keys are the following:

Who can promote the occupational pension plans that will make up the macro fund?

Among the bodies and entities that may promote the employment pension plans that can join the new fund are companies included in the sectoral agreements linked to collective bargaining, public administrations and public commercial companies and associations of self-employed workers, professional associations and mutuals linked to them.

Who will be in charge of public promotion and control of the fund?

The Promoting and Monitoring Commission will act as the public promoter of public pension funds. It is a new body belonging to the Ministry of Social Security, made up of five officials appointed by the ministry.

It will be in charge of promoting the initial constitution of the pension funds and will ensure the suitability of their development. It will also establish and approve the common investment strategy of the funds.

He will have the right of veto with respect to the decisions of the Special Control Commission that affect the investment policy and the substitution of the managing and depositary entities, as well as the modifications of the pension fund operating rules.

Who will control the management of the funds?

For all public promotion employment pension funds, a single Special Control Commission will be set up. It will be made up of seventeen members appointed by the Promoting and Monitoring Commission.

Of these, four will be proposed by the unions, another four by business organizations and nine will be appointed by the Ministry of Inclusion, Social Security and Migration.

According to the draft, “in the performance of their functions, the members of the commission will act with full independence, in defense of the interests of the participants and beneficiaries and without being able to receive instructions from any organization, group or association.”

Their mandate will last six years, with renewals every three, and they will receive a remuneration determined by regulation.

Who will manage the funds?

The funds will be administered by a managing entity with the participation of a depository entity and under the supervision and control of the same Special Control Commission for all public promotion pension funds.

The managing entity must have a volume of assets under management in pension funds, at the end of the previous year, greater than 1,000 million euros, or it must be a social security mutual whose mathematical provisions for the previous year exceed 1,000 million euros.

The chosen depository entity must be the depository of a volume of assets in pension funds that, at the end of the year prior to the one in which the proposal is made, is greater than 10,000 million euros.

The selection process of these entities will be carried out respecting “the principles of equality, transparency and free competition through an open procedure that will be determined by regulation,” says the draft.

Maximum commission cap

The commissions charged by the manager may not exceed, for all concepts, 0.4 percent of the value of the shareholders’ position accounts.

While the commissions of the depositary entity may not exceed 0.1 percent of the value of the imputed position accounts.

What pension plans will integrate the public funds?

The new simplified employment plans, which will necessarily be attached to an open public promotion employment pension fund, may integrate the public pension funds.

Also, defined contribution employment pension plans for the retirement contingency, without prejudice to the fact that they can offer defined benefits for risk contingencies such as death, disability and dependency, they are always fully insured.

In addition to the employment pension plans promoted by public administrations that are not considered simplified plans and are defined contribution plans for the retirement contingency.

What are the new simplified employment plans (PES)?

These plans will be promoted by the companies included in the statutory collective agreements of a sectoral nature that implement pension commitments in favor of their workers.

Public sector employment pension plans promoted by public administrations, including local corporations, entities and agencies dependent on them, will also have this consideration.

In addition to the pension plans for self-employed or self-employed workers, promoted by associations of self-employed workers for their associates, by professional associations or by mutual benefit societies, in which their participants are exclusively self-employed.

The promoter commissions of these PES will be those that present the project for inclusion in any of the open public funds, and it will be the Special Control Commission of the Funds that decides its integration.

PES features

They must be of the defined contribution modality for the retirement contingency, and the defined benefits that are foreseen for the contingencies of death, permanent disability and dependence of the participant and those guaranteed to the beneficiaries will have to be articulated through insurance contracts provided by the plan.

According to the draft, “the pension plan will in no case assume the risks inherent to such benefits.”

In addition, the insurance contracts provided for the coverage of death, disability and dependency of the participant must be of a duration not exceeding one year.

Investments

The assets of these pension funds will be invested exclusively in the interests of the participants and beneficiaries, the draft states, taking into account the profitability, risk and social impact of the investments.

The investment strategy of the fund must be approved by the Promoting and Monitoring Committee and may not be modified, except with its authorization.

The investment will be long-term and will be reviewed by the Promoting Commission at least every five years. Specific diversification, dispersion and consistency criteria may also be established for FPEPPs.

Information to Unitholders

The managers will use a common digital platform that allows remote access by telematic means to companies and their representatives, providing services to participants and beneficiaries. It will also allow the traceability of the history of economic movements of the participants and the promoters.

They must provide information digitally to the participants and beneficiaries on the evolution and situation of their economic rights in the plan and on other issues such as regulatory modifications or changes that may occur in the specifications of the plan, in the operation of the fund, in its policy. investment or commissions.

What will happen to the current employment plans?

The pension plans of the associated system of self-employed workers, promoted by the associations of self-employed workers or by professional associations, will have a maximum period of 5 years to be transformed into simplified employment pension plans (PES).

The draft specifies that the rest of the pre-existing associated pension plans will also have a period of 5 years to transform into an individual pension plan.

Companies that already have an occupational pension plan and are subsequently affected by a statutory collective agreement of a sectoral nature that provides for the creation of a simplified sectoral pension plan “may maintain the pension commitments established with their workers in the pre-existing plan as long as these are as beneficial as those of the newly created simplified plan, ”says the draft.

Until the year 2023 the mobilization of the consolidated rights of the participants of the PES integrated in public promotion pension funds to other pension plans will not be allowed.



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