Transferring a pension plan consists of mobilizing the sum of the contributions made by the participant in the plan -together with the returns obtained up to that moment- to another plan. It can be done both for the total amount that the saver has in a product of this type or partially. The main reason for transferring a pension plan is to change the investment to adapt it to the participant's level of risk, either with the aim of increasing the return on invested capital or to reduce product volatility.
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As indicated by Esther Pichardo, Director of Savings and Pensions at BanSabadell Vida y Pensiones, “transferring a pension plan to another entity is a simple process. To do this, you have to open a pension plan in the new banking entity, establishing the periodic contributions that you would like to make, and request the transfer of the plan”. In the event of, for example, requesting the transfer to Banco Sabadell, the client should not worry or carry out any procedure other than notifying this wish to change to the new entity, so it would be this entity that would manage everything with the previous manager.
The benefits of the pension plan and the vested rights do not change even if a transfer is made. In other words, it is possible to obtain the reimbursement of the money from a pension plan when any of the contingencies included in the foreseen assumptions occurs, such as retirement; permanent incapacity for the usual profession, absolute or severe disability; the death of the participant or the beneficiary; or severe dependency. There are also some exceptional cases of liquidity derived from a serious illness, long-term unemployment or, from 2025, contributions that are 10 years old.
In addition, in the case of individual pension plans, not only the participants can transfer their plan, but also the beneficiaries who are receiving benefits have this right.
In any case, despite being a simple procedure, it is always advisable to have the professional advice offered by the new entity to find the pension plan that best suits the client's profile and answer any questions that may arise.
Before making the transfer, it is important to take into account the following:
As Pichardo points out, as happens when hiring a pension plan, in a transfer “you always have to choose the plan that best suits your needs, and let yourself be advised by experts. The most important thing is to understand that no investment should ever disturb our sleep”. This expert affirms that "we have to invest according to our risk profile and the time horizon we have for that investment." In this line, he recalls that "a good option is always life cycle pension plans, which in addition to adapting to the risk profile of each saver, are also adapted to the vital moment in which each client finds himself: more or less far from retirement.
A transfer does not have any fiscal or economic impact as far as the pension plan is concerned, nor does it imply the loss of fiscal benefits that the contributions made based on their seniority would have. However, Pichardo recalls, “it is common in the market to offer economic bonuses to customers for transferring or contracting a pension plan, in exchange for a commitment to remain with the balance in a plan of the entity. In the event that the transfer between entities causes the breach of the agreed permanence commitment, the original entity may recover the incentive previously paid”.
It is not possible to transfer a pension plan to another person, because it is not legally allowed for the client who contracts this product to change ownership in favor of another. In any case, there is the option of changing the beneficiaries of the plan at any time in the event of death.
As for the contributions made in the new plan, they will be those requested at the time of contracting this product.
In this sense, Pichardo clarifies that "in the current regulatory framework, if a participant does not have an employment plan, or has one, but his company does not make contributions, the maximum contribution that can be made to an individual pension plan is 1,500 euros per year. In the event that there is an employment pension plan with contributions from the company, the participant may exceed 1,500 euros for an amount equal to or less than that contributed by the company, always respecting the joint legal maximum for individual contributions. and company, which is 10,000 euros per year for each participant.
In addition, this expert indicates that "to prevent transfers between entities from causing excess contributions from the participants, when transferring a pension plan between entities, information is provided, along with the rest of the concepts, of the contributions made during the current fiscal year. ”.
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