Pension plans remain a good alternative for saving for retirement, despite the fact that the government has taken away some of their appeal by reducing its tax incentives.
Jose Luis Escrivá, Minister of Social Security, decided in 2020 to reduce the limit of contributions to individual plans with the right to personal income tax relief from 8,000 to 2,000 euros, which resulted in a reduction of 75 percent.
In addition, the budgets for 2022 include another reduction of these limits from 2,000 to 1,500 euros. Declines that harm 7.5 million participants in individual pension plans and that has caused contributions to them to fall this year by about 30 percent, according to Inverco sources.
An “optimal” product
The government’s fiscal hack has not prevented “individual pension plans from continuing to be the optimal savings product for retirement,” he says. Elisa Ricón, CEO of Inverco.
Although he acknowledges that the reduction of fiscal stimuli “will limit the ability to save in the long term for many participants, who had generated an important discipline of saving in individual pension plans “.
Choose the plan well
Now, after the reduction of its tax incentives, it is more important than ever that the participant choose well the pension plan that will help him to complement his retirement pension.
Choosing one or the other will depend on the risk you want to take and the time horizon in which you are invested or that you have left for your retirement or to redeem the plan.
For this reason, “it is a long-term investment, the most advisable thing is to subscribe a variable income pension plan and within this family I would opt for products that invest globally, but with a predominance of American and European equities” , points out Mar Barrero, director of analysis at Arquia Profim Private Banking.
Another important aspect to take into account is to carry out a good diversification of plans, including fixed income and variable income.
In the opinion of Victoria Torre, director of digital offer of investment products at Singular Bank, “In pension plans, contrary to what happens with investment funds, it is very common to invest in just one and make periodic or extraordinary contributions.”
When what is recommended in your opinion is “gradually adapt pension plan portfolios to the passage of time and to the market and personal circumstances of the saver “.
For risk lovers
Among the plans preferred by analysts is the Allianz Growth 100. This is the case of Paula Mercado, director of analysis of Vdos.
It is a plan variable income suitable for young savers for whom this category has a greater interest, since “they allow them to obtain higher returns and by having a long-term investment horizon they can recover from possible stock market corrections and, in the long run, obtain important returns”.
The plan is referenced to the index Eurostoxx 50 which invests a minimum of 75% in equities of member countries of the European Union. It revalues in the year 27.72 percent and 31.65 percent at one year, with a volatility data of 17.38 percent.
For the moderate
For profiles of savers of medium risk or that have their retirement date in the medium or long term It is more interesting to invest in a plan with a lower percentage of risky assets.
Among them, Paula Mercado highlights the Ibercaja de Pensiones Sostenible y Solidario which has a profitability of 12.68 percent since the beginning of the year and 15.60 percent one year, with a volatility of 8.83 percent.
For its management, traditional financial analysis techniques are used, in addition to socially responsible investment practices.
Investment in equities and fixed income can be made in companies belonging to the most relevant sustainability indices, green and social bonds, companies related to the green economy and sustainability (renewable energies, efficient use of water …) and investment institutions collective managed following marked criteria of responsible investment.
Its periodic minimum contribution requirement is 18 euros, with a fixed commission of 1.50 percent and a deposit of 0.08 percent.
For Conservatives and Those Nearing Retirement
In those cases in which retirement is near or the investor has a conservative risk profile, it is advisable to reduce the level of risk and, therefore, the percentage of risk assets in the portfolio. In these cases, the conservative pension plans.
Among them, Paula Mercado highlights the Income 4 Fixed Income, one of the most profitable in the year. It revalues 1.02 percent and 1.62 percent at one year, with a volatility data of 1.24 percent.
It is a plan that invests in fixed income assets, deposits and money market assets. Depending on the market vision at any given time, the weight of each type of asset in the portfolio is underweight or overweight and its management takes as a reference the Eonia index.
At least 50 percent of the fixed income portfolio will be allocated to issues with a rating greater than or equal to BBB-. The modified duration in the portfolio will normally be in the range 0 and 2 years.
For its subscription, a minimum contribution of 50 euros and periodic contributions of 30 euros are required to remain a participant in the plan. His fixed commission is 0.85 percent and the deposit fee is 0.10 percent.