Effective April 2, vested rights in pension plans may be accessed within a 6-month period from March 14, 2020 (the date Royal Decree 463/2020 declaring a state of emergency came into force). This period may be extended in cases of unemployment resulting from a temporary layoff (ERTE) or cessation of activity by self-employed workers due to COVID-19.
As previously informed, Royal Decree-Law 11/2020 of March 31, which adopts a series of additional urgent social and economic measures to address COVID-19, was published in the Official State Gazette (BOE) on April 1.
The regulation includes a series of measures, effective from April 2nd, among which we would like to highlight the possibility of accessing pension plans in the event of unemployment or cessation of activity resulting from the health crisis caused by COVID-19.
Specifically, to help alleviate liquidity needs, on an exceptional basis and subject to further regulatory development, the consolidated rights in pension plans may be exercised during a period of 6 months from March 14, 2020 (date of entry into force of Royal Decree 463/2020), which may be extended, in cases of unemployment resulting from a temporary layoff (ERTE) and cessation of activity of self-employed workers or freelancers that occur as a result of COVID-19.
Who does it apply to?
Pension plan participants may, exceptionally, exercise their vested rights in the following cases:
a) Being legally unemployed due to a temporary layoff (ERTE) resulting from the current health crisis.
b) Being a business owner whose establishment has been closed to the public as a result of the state of emergency.
c) Being self-employed workers previously registered with the Social Security system as such and who have ceased their activity as a result of the health crisis.
Amount of vested rights and reimbursement.
This amount may not exceed:
• a) The wages not received while the ERTE (Temporary Employment Regulation File) remains in effect, in the first scenario mentioned above.
• b) The estimated net income that has not been received while the suspension of opening to the public mentioned in the second scenario remains in effect.
• c) The estimated net income that has not been received while the health crisis situation caused by COVID-19 remains in effect, for the third scenario.
The amount must be proven by the participants in pension plans who request the withdrawal of their vested rights.
It is anticipated that the conditions and terms under which vested rights may be exercised in the first scenario may be regulated by decree.
Attention. The mention of a regulatory development raises the question of whether, for the application of the regime, it is necessary to wait for that development, although the fact that it is presented as "possible" allows the interpretation that the provision has effects from its entry into force.
The reimbursement of vested rights will be made effective at the request of the participant, subject to the tax regime established for pension plan benefits.
Therefund must be made within a maximum period of seven business days from the date the participant submits the corresponding supporting documentation.
Extension of availability:
All of the above also applies to policyholders of insured pension plans, company social welfare plans, and mutual social welfare funds referred to in Article 51 of Law 35/2006 on Personal Income Tax.
Possibility of extending the deadline to request payment
Finally, the Government may extend the aforementioned 6-month period for requesting payment from pension plans, taking into account the needs for available income in light of the situation arising from the circumstances of economic activity caused by the current health crisis.
You can contact this professional office for any questions or clarifications you may have.
Warm regards,
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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