Private pension, also known as supplementary pension, is a type of long-term savings, which accrues interest, and which can be used in the future as a private pension, for example.
According to foodanddrinkjournal, private pension is an investment fund, managed by banks or insurance companies and supervised by the federal government. However, it has no relationship with Social Security and the INSS (National Institute of Social Security), being a product offered by the private sector.
In addition, it can be opened or closed. Closed pensions are pension funds offered to specific groups, for example, workers in a company. Open social security is one that is accessible to anyone, through banks or insurance companies.
How private pension works
Under this system, the insured person defines a value to invest and its periodicity. For example, he may choose to apply R $ 200 every month. In general, the entity that sells the plan offers simulations of how much it would be necessary to invest, and for how long, to obtain the desired income.
The money invested in the private pension plan will be managed by a manager, who will invest it in stocks, government bonds or other assets, in order to obtain an advantageous income in the long run.
The profitability obtained, however, does not remain with the insured, since banks and insurance companies charge to manage the portfolio, in addition to other costs that those who intend to acquire, need to be aware.
Private pension plans
This investment is differentiated by the types of private pension that are offered, known as PGBL and VGBL.
PGBL – Free Benefit Generator Plan
The PGBL plan can be acquired by those who have high income and who complete the income tax return, since the amount invested is exempt from tax in up to 12% of gross income. This is due to the fact that the amount reserved is a deduction from income tax.
This is the case, for example, of someone with a gross salary of R $ 6,000.00. Since the amount allocated to the plan is a maximum of R $ 720.00 (6,000×12%), the Income Tax will only apply to the remaining R $ 5,280.00.
A disadvantage of this is that IR is charged on all the money invested at the time of the redemption.
VGBL – Lifetime Free Benefit Generator
The VGBL is a plan originally made for life insurance plans, characterized by having Income Tax only on the plan’s income and not on the total invested, as in the PGBL.
This plan is mainly indicated for people who have low income, in which the income tax declaration is simplified, or for those who do not even declare it. In addition, it appears as an option for those who have already taken a PGBL that corresponds to 12% of the gross salary, investing the difference in a VGBL.
Taxation of private pension
The government authorizes the private pension to be taxed in two ways, after the redemption, either by the regressive regime or by the progressive regime. It is necessary to be attentive to the regime chosen according to the plan, as the final value may be lower because of the tax.
For regressive taxation, the discount is less and less the more time invested, being more advantageous for those who choose to redeem the money all at once. The discounts happen as shown in the table below:
|Up to 2 years||35%|
|From 2 to 4 years||30%|
|From 4 to 6 years||25%|
|From 6 to 8 years||20%|
|From 8 to 10 years||15%|
|Over 10 years||10%|
The progressive taxation has a bigger discount the bigger the redemption, so it is more advantageous for those who think about rescuing the pension in the form of rents, in which it is taxed as in a salary, with the discounts from the table:
|Calculation basis (R $)||Discount||Installment to be deducted (R $)|
|Up to 1,903.98||0%||0.00|
|From 1,903.99 to 2,826.65||7.5%||142.80|
|From 2,826.66 to 3,751.05||15%||354.80|
|From 3,751.06 to 4,664.68||22.5%||636.13|
Rescue of private pension
The money invested and the income are accumulated over the years. After a certain period, the investor can choose to receive what he invested in installments, withdraw when needed or redeem everything at once.
If you choose the installments, they can be for life – such as retirement – or for a specified period. In the case of lifetime installments, the amount will be calculated by the bank considering the life expectancy of the beneficiary. When a period for receipt is determined, the monthly amount will depend on how much has accumulated and the redemption term.
There is no obligation for the insured person to retire to receive private pension money. Therefore, this investment can be used for other long-term purposes, such as thinking about paying for the child’s college.
Coverage in the event of death and disability
In private pension plans, institutions usually offer an annuity due to death or permanent disability of the insured.
This savings is a kind of life insurance, which guarantees payments to the family, in the event of the death of the beneficiary, or to the investor himself, in case he loses his ability to work before retiring.