How to redeem the unemployment pension plan

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redeem pension plan

The term “withdrawing the pension plan due to unemployment” refers to the instance in which a person has the possibility of recovering the capital they have contributed with their work and, at the same time, obtaining the return that this capital may have generated. If you are currently unemployed and want to know how to recover your pension plan early, what you should submit and when you will be able to collect it, read on and you will get all the answers you are looking for.

What is a pension plan?

A pension plan or pension fund is an asset with which it has been established that retirement plans will be implemented. The contributions to this fund are made by employers and employees during the course of the regular employment relationship. What is the aim? These financial assets are intended to generate long-term asset growth.

Although their main motivation is to help create a way of saving for retirement and it has become a very common practice to provide for the retirement years, it is possible by law to take over savings that have been deposited in a pension plan before the retirement date, provided that a number of situations involving loss of income can be accounted for and accredited.

In order to cash in the pension plan early, a person must be in certain specific circumstances, such as serious illness, disability, death, eviction or long-term unemployment. In the latter cases, it is best to find out what the requirements are and in which cases you can be considered a candidate for early withdrawal from your pension plan.

Requirements for withdrawing from the pension plan due to unemployment

If you are unemployed, four conditions must be met in order to redeem your pension plan:

  1. Legal unemployment status

If you are involuntarily unemployed, you meet this requirement. If you are self-employed, you can also prove that you are not registered in the RETA (RETA).

  1. Registered as a jobseeker  

To be able to contribute to a pension plan, you must be registered with the Public Employment Service (SEPE). This procedure is always carried out in the Autonomous Community of residence.

  1. Exhaustion of the contributory unemployment benefit or no entitlement to it

This point does not take into account subsidies (such as aid in the case of people over 55 years of age), so it is only limited to what is commonly known as “unemployment”.

  1. At least 10 years of seniority

In order to apply for the refund, the applicant must have at least 10 years of seniority, which are in any case counted from the 1st of January 2015.

What documents do I need to submit?

In order to recover the unemployment pension plan correctly, you must submit a number of documents and forms. These are:

  • Identity document.
  • A document from the Public Employment Service (SEPE) certifying that you are registered as a jobseeker.
  • Another certificate, also issued by the SEPE, showing that you are not entitled to receive contributory benefit.
  • The application for redemption provided by the managing body.
  • The documentation proving the unemployment situation (a letter of dismissal or a positive resolution of an ERE).
  • Form 145 from the Tax Agency to adjust the withholding on the amount to be withdrawn.

How can I collect my redemption?

As we have already said, this will be established by the regulations of each plan and you can opt for any of the forms that the law contemplates. In general, they can be reimbursed in the form of capital, annuities or a combination of both. If you choose periodic annuities, you must prove that you are still unemployed in order to allow early redemption.

Some frequently asked questions

  1. Is it true that I need to be unemployed for 12 months to be able to redeem an unemployment pension?

Until some time ago it was required to be a jobseeker for at least one year, but nowadays it is sufficient not to have access to the contributory benefit, so you can redeem the plan at the very moment you become unemployed.

  1. Is it possible to be both a participant and a beneficiary of a contingency at the same time?

It is incompatible to make contributions and receive benefits for the same contingency. You can find this information in article 11.5 of the Pension Plans and Funds Regulations.

  1. Can I receive the over-52s allowance and withdraw my pension plan?

If you meet all four of the above-mentioned requirements, you can redeem your pension, but there is one important detail that must be taken into account. In order to do so, you must prove the income requirement (which must not exceed 75% of the minimum wage) and the surrender will be taken into consideration for this limit (you must plan not to exceed these limits).

Contact us

If you need further advice, please do not hesitate to contact us. At Blegal we have a broad portfolio of services ranging from property management to insurance brokerage. Our motto: we always like to go one step further while maintaining a close relationship with our clients.

Our professional, knowledgeable and diverse team works closely together to ensure that every client gets what they need. Whether you come to our offices in person, by phone, email or video conference, you can count on us to answer any questions you may have on this or similar topics.

Now you know: if you are in the preliminary stages of redeeming your unemployment pension plan, don’t hesitate to consider all the information we have given you in this article. It will help you to reach your goals in the best way possible.

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