What are the statutory pension benefits? What do they cover?
The state pension scheme is part of the social security system in Spain. There are two categories of pensions: contributory and noncontributory.
Contributory benefits are for everyone who contributes to the social security system. These include retirement, disability, survivor’s, and parental benefits and are funded by taxes withheld from employees’ income by employers. The level of the pension depends on contribution rates, which vary according to the type of agreement the worker has and the type of job performed. Noncontributory benefits are paid to low-income households below a certain threshold and do not require contributions to be paid out.
Retirement benefits under the state pension scheme are provided under the General Regime by the National Institute of Social Security (INSS). Additional retirement benefits may be payable under the Special Regime, covering the self-employed, agriculture workers, merchant mariners, mine workers, and domestic personnel.
Old-age pension benefits are funded through a combination of mandatory employee and employer contributions, although employers often carry more of this burden. Contribution rates vary according to the type of agreement the worker has and the type of job performed.
What pension benefits do most employers offer?
Apart from statutory social security contributions, employers in Spain are not required to provide supplemental benefits.
Velocity Global does not offer a pension plan in Spain, so this benefit must be provided via an allowance.
Can an employer make direct contributions to an employee’s private pension?
If the employer offers a pension plan, they can make direct contributions to an employee’s private pension.