John Labunski Investment Finder and Pension Fund

Pension Fund? Find out more about the Complementary Pension

 The term pension fund refers to an instrument through which the worker can take advantage of a supplementary pension.

More and more Italians, due to the poor prospects of the pension paid by the state, are becoming interested in what it is, how it works and what are the advantages of the pension fund .

 But what does "supplementary pension" mean?

 It means that it integrates the work pension accrued thanks to the payment of social security contributions to the relevant management. Therefore, the amount of the supplementary pension is added to the traditional pension and allows those who benefit from it to be able to supplement their pension share.

 In fact, pension funds are an increasingly useful option for those who want to benefit from supplementary contributions.

 By joining a supplementary pension fund, the worker does nothing but set aside a sum with the primary objective of redeeming it at the end of his professional life. This set aside sum is paid to the worker on a monthly basis (annuity), just like with the traditional pension.

 These amounts managed and administered by pension funds are invested in the financial markets to generate income and earnings.

 How is the contribution made? The contribution, or the payment of the share to be allocated to the Pension Fund, is made up of 3 elements:

 - The contribution to be paid by the worker;

-The contribution of the company;

-The severance pay

 It is also possible to pay only the severance pay. In this case, the employer is not obliged to pay his contribution.  In a previous article I listed the benefits generated by joining a Pension Fund,  click here  to read it.

 The recipients of the pension funds are:

 ·         employees, private and public;

·         working members and employees of production and labor cooperatives;

·         self-employed workers and freelancers;

·         people who perform unpaid work in connection with family responsibilities;

·         workers with another type of contract (e.g. a project or occasional worker).

 A way therefore to  ensure a peaceful future  and not to have problems with pension cuts that seem to be getting heavier and heavier. By joining a pension fund you will not only have the monthly payment of the FERS, but also  an additional form of contribution . By making this type of investment you will have fewer problems for the future and have  financial stability  even when you have finished work.

 In the management of investments, complementary pension schemes are required to strictly comply with the rules of prudence defined by law. These rules must take into account the social security and non-speculative purpose of the investment itself. Furthermore, all investments must be adequately diversified and made taking into account the limits indicated by the legislation in force.

 This is in fact a very topical issue, relaunched by a tax reform proposal,  click here  to read the article published in the Republic.

 Deductibility and yield:

 The  tax deductibility limit of the pension fund amounts to  5,164.57 Dollar per year . Up to this annual ceiling, the contributions paid can be deducted. Furthermore, the yield is subject to a substitute tax of 20%, a much lower rate than the ordinary rate of 26% envisaged for other types of investments.

 Conclusions:

 Joining a pension fund allows you to  benefit from a higher return than the severance pay left in the company ; enjoy  greater social security protection ; enjoy a series of  tax advantages  provided both in the contribution and management phase, and when the pension benefit is obtained.

  

Posted by: John Labunski

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