Public Funded Scheme
Regime público de capitalização
Coverage
Voluntary participation
- Persons covered under a mandatory social security scheme such as the general social security scheme and the retirement pension scheme for lawyers and solicitors from the Lawyers’ and Solicitors’ Pension Fund can voluntarily join this scheme.
- Since 2018, persons with voluntary social insurance (seguro social voluntário) can also voluntarily join the scheme.
- Annual renewal is automatic; suspension of obligatory contributions is automatic in some cases (e.g. upon termination of employment); there is also the possibility for voluntary suspension (opting out).
Financing
General finances
- Fully funded scheme based on monthly contribution payments. The revenues of the investments of the fund assets are part of the funding. It includes also the amounts of the alienation and reimbursement of investments of the assets.
Contribution payments
- Participants provide contribution payments and decide upon the respective amount within the defined range: as a rule, contributions are 2% or 4% of a base amount equivalent to the average remuneration used to calculate social security contributions in the first 12 months of the last 14 months, counting immediately from the month of affiliation (with annual adjustments). Persons aged 50 and above can pay up to 6%.
- Contribution payments will be converted into units of participation after their payment.
- As of 2018, employers can pay contributions for the individual accounts of their employees.
State support & incentivising strategies
- For contributions made by individuals: 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 over 35. For tax benefits (benefícios fiscais), there is a global limit concerning the deductions (deduções à coleta), depending on the income brackets of IRS.
Administration
- The ‘Institute of Management of Capitalisation Funds of Social Security’ (Instituto de Gestão de Fundos de Capitalização da Segurança Social, I.P.) manages the scheme. This institution is allowed to make contractual arrangements with private entities to manage part of the assets.
- The contribution payments are made by direct debit to the ‘Institute of Financial Management of Social Security’ (Instituto de Gestão Financeira da Segurança Social, I.P.).
- The ‘Institute of Social Security’ (Instituto da Segurança Social, I.P.), has the task of ensuring affiliation to the scheme and of informing interested persons.
- There is a ‘Fund of Retirement Certificates’ (Fundo de Certificados de Reforma, FCR). The Fund comprehends two portfolios to manage the assets: one concerned with the accumulation phase (FCR –A), another related to the payment phase (FCR –U).
- The ‘Civil Servants’ Pension Agency’ (Caixa Geral de Aposentações, CGA) is in charge of the payment of benefits to its beneficiaries.
Qualifying Conditions
- Based on entitlement to old age pension from different schemes, incl. the general social security scheme, the convergent social protection scheme and the retirement pension scheme for lawyers and solicitors from the Lawyers’ and Solicitors’ Pension Fund.
Benefits
Pension payments
- Pension benefits can be paid as one-time lump sums or monthly pension payments (if the monthly amount is, at least, equal to 2.5% of the Social Support Index (IAS).
- The total amount of benefits can also be transferred to pension plans of family members (spouse and/or children).
- Persons can choose a mix: a) benefits partly paid as capital lump sum payments and the remainder as a monthly pension (if monthly amount is not lower than 10% of the Social Support Index (IAS)); b) transfer part of the amount to pension plans of family members (spouse and/or children) and the remainder will be paid as monthly annuity (if monthly amount is not lower than 10% of the Social Support Index (IAS)).
Taxation and social security contributions on pension payments
- Same as for complementary schemes of collective initiative.
- Pension payments are not subject to social security contributions.
Coverage
Financing
Administration
Qualifying Conditions
Benefits
Voluntary participation
- Persons covered under a mandatory social security scheme such as the general social security scheme and the retirement pension scheme for lawyers and solicitors from the Lawyers’ and Solicitors’ Pension Fund can voluntarily join this scheme.
- Since 2018, persons with voluntary social insurance (seguro social voluntário) can also voluntarily join the scheme.
- Annual renewal is automatic; suspension of obligatory contributions is automatic in some cases (e.g. upon termination of employment); there is also the possibility for voluntary suspension (opting out).
General finances
- Fully funded scheme based on monthly contribution payments. The revenues of the investments of the fund assets are part of the funding. It includes also the amounts of the alienation and reimbursement of investments of the assets.
Contribution payments
- Participants provide contribution payments and decide upon the respective amount within the defined range: as a rule, contributions are 2% or 4% of a base amount equivalent to the average remuneration used to calculate social security contributions in the first 12 months of the last 14 months, counting immediately from the month of affiliation (with annual adjustments). Persons aged 50 and above can pay up to 6%.
- Contribution payments will be converted into units of participation after their payment.
- As of 2018, employers can pay contributions for the individual accounts of their employees.
State support & incentivising strategies
- For contributions made by individuals: 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 over 35. For tax benefits (benefícios fiscais), there is a global limit concerning the deductions (deduções à coleta), depending on the income brackets of IRS.
- The ‘Institute of Management of Capitalisation Funds of Social Security’ (Instituto de Gestão de Fundos de Capitalização da Segurança Social, I.P.) manages the scheme. This institution is allowed to make contractual arrangements with private entities to manage part of the assets.
- The contribution payments are made by direct debit to the ‘Institute of Financial Management of Social Security’ (Instituto de Gestão Financeira da Segurança Social, I.P.).
- The ‘Institute of Social Security’ (Instituto da Segurança Social, I.P.), has the task of ensuring affiliation to the scheme and of informing interested persons.
- There is a ‘Fund of Retirement Certificates’ (Fundo de Certificados de Reforma, FCR). The Fund comprehends two portfolios to manage the assets: one concerned with the accumulation phase (FCR –A), another related to the payment phase (FCR –U).
- The ‘Civil Servants’ Pension Agency’ (Caixa Geral de Aposentações, CGA) is in charge of the payment of benefits to its beneficiaries.
- Based on entitlement to old age pension from different schemes, incl. the general social security scheme, the convergent social protection scheme and the retirement pension scheme for lawyers and solicitors from the Lawyers’ and Solicitors’ Pension Fund.
Pension payments
- Pension benefits can be paid as one-time lump sums or monthly pension payments (if the monthly amount is, at least, equal to 2.5% of the Social Support Index (IAS).
- The total amount of benefits can also be transferred to pension plans of family members (spouse and/or children).
- Persons can choose a mix: a) benefits partly paid as capital lump sum payments and the remainder as a monthly pension (if monthly amount is not lower than 10% of the Social Support Index (IAS)); b) transfer part of the amount to pension plans of family members (spouse and/or children) and the remainder will be paid as monthly annuity (if monthly amount is not lower than 10% of the Social Support Index (IAS)).
Taxation and social security contributions on pension payments
- Same as for complementary schemes of collective initiative.
- Pension payments are not subject to social security contributions.
Legal Basis: Framework Law on Social Security (Lei de Bases da Segurança Social), Art. 82; Decree-Law No. 26/2008, 22 February as amended and republished by Decree-Law No. 82/2018, 16 October; Tax Benefits Code (Estatuto dos Benefícios Fiscais).