Occupational Pension Schemes
Previdência Complementar Coletiva
Coverage
Voluntary participation
- Employed population, with participation being based on collective or individual agreements.
- Possibilities for voluntary enrolment vary in relation to the different conditions offered by the employer or public entity.
- Public entities, either at the federal, state, or municipal level can create a complementary pension fund for some or all of their employees.
Financing
General finances
- Fully funded personal pension plans based on contribution payments and capital revenues.
- For schemes offered by public entities to public sector employees, transfers from the state budget may finance deficits (dependent on the specific legislatures).
Contribution rates
- Contribution payments are usually split between the employer and the employee (proportions vary).
- For public sector employees, the public entity for which the employee works provides a contribution equal to the one chosen by the employee, up to the maximum of 8.5% of the contribution assessment ceiling of the statutory old age pension scheme for private sector employees.
State support
- Contribution payments of the employee (up to 12% of the monthly income) can be deducted from the personal income tax base.
- The investment returns from the funds are not taxed.
Administration
- Pension plan providers manage pension funds and pay benefits directly to the eligible person.
- ‘Superintendência Nacional de Previdência Complementar’ and ‘Comissão de Valores Mobiliários’ oversee the schemes.
Qualifying Conditions
- Employee entitled to occupational pension benefits, with no minimum retirement age specified by law.
- Conditions are regulated in pension regulations at company or collective level.
Benefits
Pension payments
- Dependent on the terms of pension payment (lump sum payment, fixed-term or lifelong pension), primarily based on the amount of contributory earnings, length of contribution period and capital revenues.
Taxation and social security contributions
- Pension payments are subject to income tax (see statutory old age pension scheme for private sector employees).
- Pension payments are not subject to social security contributions.
Coverage
Financing
Administration
Qualifying Conditions
Benefits
Voluntary participation
- Employed population, with participation being based on collective or individual agreements.
- Possibilities for voluntary enrolment vary in relation to the different conditions offered by the employer or public entity.
- Public entities, either at the federal, state, or municipal level can create a complementary pension fund for some or all of their employees.
General finances
- Fully funded personal pension plans based on contribution payments and capital revenues.
- For schemes offered by public entities to public sector employees, transfers from the state budget may finance deficits (dependent on the specific legislatures).
Contribution rates
- Contribution payments are usually split between the employer and the employee (proportions vary).
- For public sector employees, the public entity for which the employee works provides a contribution equal to the one chosen by the employee, up to the maximum of 8.5% of the contribution assessment ceiling of the statutory old age pension scheme for private sector employees.
State support
- Contribution payments of the employee (up to 12% of the monthly income) can be deducted from the personal income tax base.
- The investment returns from the funds are not taxed.
- Pension plan providers manage pension funds and pay benefits directly to the eligible person.
- ‘Superintendência Nacional de Previdência Complementar’ and ‘Comissão de Valores Mobiliários’ oversee the schemes.
- Employee entitled to occupational pension benefits, with no minimum retirement age specified by law.
- Conditions are regulated in pension regulations at company or collective level.
Pension payments
- Dependent on the terms of pension payment (lump sum payment, fixed-term or lifelong pension), primarily based on the amount of contributory earnings, length of contribution period and capital revenues.
Taxation and social security contributions
- Pension payments are subject to income tax (see statutory old age pension scheme for private sector employees).
- Pension payments are not subject to social security contributions.
Legal Basis: Complementary Laws 108/01 and 109/01 (Lei Complementar 108/01 and 109/01).