Complementary Schemes of Individual Initiative
Regimes complementares de iniciativa individual
Coverage
Voluntary participation
- All persons are eligible, depending on the acceptance by the management entity.
Financing
General finances
- Fully funded personal pension plans based on personal contribution payments and capital revenues.
Contribution payments
- Persons provide contribution payments and decide upon its amount individually.
State support & incentivising strategies
- Tax-deductions on contribution payments (20%) capped by maximum amounts depending on the person’s age: EUR 400 for persons under 35; EUR 350 for persons aged 35-50; EUR 300 for persons over 50. For tax benefits (benefícios fiscais), there is a global limit concerning the deductions (deduções à coleta), depending on the income brackets of IRS.
- For corporations, contribution payments are considered as costs (cannot exceed 15% of the salary mass).
Administration
- Different kinds of entities: pension fund management entities, life insurance companies, investment fund management entities; mutualist entities also play a role at this level.
- Pension funds and insurance contracts are regulated and supervised by the ‘Insurance and Pension Funds Supervisory Authority’ (Autoridade de Supervisão de Seguros e Fundos de Pensões, ASF).
- Investment funds are regulated and supervised by the ‘Portuguese Securities Market Commission’ (Comissão do Mercado de Valores Mobiliários).
Qualifying Conditions
- Conditions vary with the stipulated conditions in the plans.
- For retirement savings plans (PPR’s), a legal framework exists, setting clear conditions with regard to the withdrawal of pensions; if conditions are disregarded penalties apply; one requirement is usually to have reached age 60. Early withdrawals without penalties are possible in certain circumstances, such as long-term unemployment, serious illness or permanent incapacity for work of the participant (or of members of the household).
Benefits
Pension payments
- Only defined contribution plans.
- Benefits are paid as periodical and regular annuities or as lump sum payment (same as for complementary schemes of collective initiative).
Taxation and social security contributions on pension payments
- Same as for complementary schemes of collective initiative.
Coverage
Financing
Administration
Qualifying Conditions
Benefits
Voluntary participation
- All persons are eligible, depending on the acceptance by the management entity.
General finances
- Fully funded personal pension plans based on personal contribution payments and capital revenues.
Contribution payments
- Persons provide contribution payments and decide upon its amount individually.
State support & incentivising strategies
- Tax-deductions on contribution payments (20%) capped by maximum amounts depending on the person’s age: EUR 400 for persons under 35; EUR 350 for persons aged 35-50; EUR 300 for persons over 50. For tax benefits (benefícios fiscais), there is a global limit concerning the deductions (deduções à coleta), depending on the income brackets of IRS.
- For corporations, contribution payments are considered as costs (cannot exceed 15% of the salary mass).
- Different kinds of entities: pension fund management entities, life insurance companies, investment fund management entities; mutualist entities also play a role at this level.
- Pension funds and insurance contracts are regulated and supervised by the ‘Insurance and Pension Funds Supervisory Authority’ (Autoridade de Supervisão de Seguros e Fundos de Pensões, ASF).
- Investment funds are regulated and supervised by the ‘Portuguese Securities Market Commission’ (Comissão do Mercado de Valores Mobiliários).
- Conditions vary with the stipulated conditions in the plans.
- For retirement savings plans (PPR’s), a legal framework exists, setting clear conditions with regard to the withdrawal of pensions; if conditions are disregarded penalties apply; one requirement is usually to have reached age 60. Early withdrawals without penalties are possible in certain circumstances, such as long-term unemployment, serious illness or permanent incapacity for work of the participant (or of members of the household).
Pension payments
- Only defined contribution plans.
- Benefits are paid as periodical and regular annuities or as lump sum payment (same as for complementary schemes of collective initiative).
Taxation and social security contributions on pension payments
- Same as for complementary schemes of collective initiative.
Legal Basis: Framework Law on Social Security (Lei de Bases da Segurança Social), Art. 84; Decree-Law No. 12/2006, 20 January, amended and republished by Law No. 147/2015, 9 September (last amendment: Decree-Law No. 84/2020, 12 October); Decree-Law No. 158/2002, 2 July; Corporate Income Tax Code (CIRC – Código do Imposto sobre o Rendimento das Pessoas Coletivas); Personal Income Tax Code (CIRS – Código do Imposto sobre o Rendimento das Pessoas Singulares); Tax Benefits Code (Estatuto dos Benefícios Fiscais).