A source of long discussions in recent times, social security reform is a subject that brings up other topics, such as private pension for companies, for discussion . And that’s what we’re going to talk about in this article.
With the proposal for possible adjustments in social security, the government aims to generate more savings and ensure that the country’s finances do not go through future problems.
These adjustments include rules and laws that will make the retirement process more rigorous.
In the face of this highly unstable scenario, the concern with retirement became latent in the lives of many Brazilians. Therefore, private pension plans appear as a possible solution .
With this in mind, many companies have invested in the benefit of private pension as an attraction for new talents and to create tranquility for their employees.
Check out, in this article, what private pension is for the company and how it can generate benefits in the short and long term for everyone. Good reading!
What is business private pension?
This is a pension model that works as a contribution given by the company as a benefit to its employees.
The private pension company for t also commonly can be seen as a concern for the financial well-being of its employees . Because this fund ends up becoming a long-term reserve that the employee may receive, according to the rules defined in the contract, and that you will see throughout this article.
How does company private pension work?
This financial contribution can be made through a joint contribution , between the company and the employee. For example: if the employee contributes 5% of his salary, the company contributes the same amount .
It is a very broad benefit that can be worked on in many ways. The amount invested by the company can be fixed, based on positions or on top of the employee’s contribution.
Another way to contribute can be the offer of a collective plan made by the company , where only the employee contributes, being able to redeem this amount when he leaves the company or take the plan with him.
How does the deadline for receiving the benefit work?
The private security company to have a variable period of receipt, which is directly linked to the contract made by the company to the employee .
Generally, this period is 7 to 10 years of the employee’s working time, and he / she can receive the benefit both in case of termination of contract and in the request for dismissal.
Remember that these are rules that can vary according to each contract. That is why it is important to understand what labor rules you are dealing with.
But it is worth noting that, this is a very important point of private pension for the company . This is because the contracting company can create a kind of plan that grows as the employees spend more time in the company.
Creating a model that can be, for example:
- Employees who have up to 5 years working in the organization: in a possible departure from the company, they can withdraw 100% of the amount invested by it, plus 50% of the amount invested by the company;
- Employees who have between 5 and 10 years working in the organization: in a possible departure from the company, they can withdraw 100% of the amount invested by the company, plus 75% of the amount invested by the company;
- Employees who are over 10 years old working in the organization: in a possible exit, they can withdraw the total invested in their pension plan.
The private pension models to company vary according to the company ‘s objectives and should be analyzed very carefully.
The company contracting the benefit may still set contribution ceilings on the pension plan of its employees that are in line with their financial situation .
What are the private pension plans?
There are two investment models in private pension : VGBL and PGBL. Each employee will be able to choose which modality best fits their profile.
However, be aware that the decision is made at the beginning of the contract and cannot change halfway.
VGBL – Lifetime Free Benefit Generator
In the Private Pension Plan model VGBL , the person accumulates his investments and his money is earning. When the client stops investing and withdraws his money (investments + income), Income Tax is only applied to income .
In other words: if you have a VGBL plan and have invested R $ 100,000.00 and that money has yielded an additional R $ 50,000.00, at the time of making the redemption, the Income Tax will only apply to the R $ 50,000.00 , which were income.
PGBL – Free Benefits Generator Plan
In the PGBL model , you will also be investing your money and the value will be yielding. The difference is that the Income Tax calculation base will be on the total: investments + income.
Taking the same example: if you have invested R $ 100,000.00 and that money has yielded an additional R $ 50,000.00 now the Income Tax will be levied on R $ 150,000.00 (investments + income) and not only on income.
So is VGBL better than PGBL?
Given the above explanation, apparently VGBL is better than PGBL . Of course, if the calculation base for Income Tax will be lower, focusing only on investments.
But calmly, the difference between the two models is not only based on the calculation of Income Tax.
In the PGBL model, the taxpayer has the possibility to deduct all of his social security contributions in his Personal Income Tax.
Before explaining how this happens, I inform you that everyone who has an income above R $ 55,000.00 has to pay Income Tax .
Now for an example: you have an income of R $ 100,000.00 and would have to pay 27.5% of income tax. You can use your investments in the PGBL model to get a tax benefit and pay less. For this to be possible, it is necessary to pay social security .
PGBL can then be a good choice for those who have a high income.
While VGBL is always advantageous at the time of redemption. PGBL can be advantageous at the time of investment.
What are the benefits of private pension for employees?
With the country’s economic instability, and a possible reform planned for the coming years, the concern arises as to how the employee can have a complementary income. Since social security corresponds to a ceiling, limiting its receipt in the future to the amount of up to R $ 5,839.45.
In this way, the employee who subscribes to a corporate private pension plan may have a higher income, thus guaranteeing stability when he retires .
For employees who do not have the habit of saving or do not have savings or emergency funds, this pension model is a great solution.
By making an amount while working he can count on that money for future projects.
How is the monthly social security contribution made?
The amount to be deposited monthly by the employee may be deducted directly from the payroll and their tax deduction is also made in the same month.
Another form of collaboration can be the monthly deposit, made voluntarily by the employee in agreement with the company.
What are the benefits of private pension for companies?
Companies that offer this type of contribution to their employees have the benefit of attracting and retaining talent .
In addition, offering this type of benefit improves employee satisfaction and in this way their productivity may increase.
Just to give you an idea, according to the National Federation of Private Pension and Life (Fenaprevi) last year, 26% of pension plans carried out in Brazil, were made by companies for their employees .
Thus, this is a practice that has been growing and becoming a differential and a good attraction for companies. Together with the Health and Insurance Plans .
Is private pension for companies mandatory?
No, this system is carried out on an optional basis by companies. Corresponding to the general Social Security regime, provided for in Article 202 of the Federal Constitution, in Complementary Laws No. 108 and No. 109, of 2001 , and in specific regulations.
Therefore, it is optional to offer this benefit to employees.
How to hire a private pension plan for a company?
Companies that offer the private pension benefit can still choose the type of pension they wish to hire. They can be opened or closed. Check out better below:
Closed Pension Plan
In this model, the company will be able to create a multi-sponsored pension fund , where the contribution can happen in a collaborative way with the contribution of the employee and the employer.
Another option of the open model is the creation of a closed private pension fund (EFPC) . In this way, the company itself creates the terms and rules for collaboration and receipt.
Generally, this is a system widely used by large companies and has a greater investment to be implemented in an organization.
Open Pension Plan
This type of private pension for the company is the most used. It can be done through an insurance broker , where the characteristics and profile of the company will be analyzed. In addition to the financial institution where they will be opened to accounts. That way, the company will be choosing the best pension options.
Offering good benefits to your employees is taking care of the health of your business. Satisfied and engaged employees are more productive and help companies more effectively, so that they achieve their goals!