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Practical manual for Income Tax 2021.

3. Premiums paid to insured pension plans

Insured pension plans, the premiums for which may be subject to a reduction in the general tax base, are legally defined as insurance contracts that must meet following :

  1. The taxpayer must be the policyholder, insured and beneficiary.

    However, in the event of death, the right to benefits may be generated under the terms provided for in the regulations governing pension plans and funds.

  2. The contingencies covered must be only those provided for in article 8.6 of the consolidated text of the Law on the Regulation of Pension Plans and Funds approved by Royal Legislative Decree 1/2002, of November 29 (retirement, total and permanent incapacity for work for the usual profession or absolute and permanent incapacity for any work, and severe disability; death of the participant or beneficiary and severe or great dependency of the participant), and must have retirement as its main coverage under the terms established in article 49.1 of the IRPF Regulations .

    Early withdrawal, in whole or in part, will only be permitted in these contracts, in the cases provided for in article 8.8 of the consolidated text of the Law on Regulation of Pension Plans and Funds (long-term unemployment, serious illness and from 2025 for contributions with 10 years of seniority).

    However, and in order to facilitate those affected by the volcanic eruption on the island of La Palma to meet unforeseen liquidity needs, article 11 of Royal Decree-Law 20/2021, of October 5, by which urgent support measures are adopted for the repair of the damage caused by volcanic eruptions and for the economic and social reconstruction of the island of La Palma ( BOE of 6), has established, on an exceptional basis and exclusively during the period between October 6, 2021 and July 5, 2022 , the possibility that the insured of the insured pension plans may dispose in advance in certain cases of their consolidated rights in these plans, establishing the conditions and the maximum amount of the provision. The assumptions for early disposal of consolidated rights are discussed in this Chapter, within the common rules applicable to contributions to social security systems, in the section on early disposal of consolidated rights .

    The right to early withdrawal in insured pension plans will be valued at the amount of the mathematical provision to which no penalties, expenses or discounts may be applied. However, if the entity has assigned investments, the right of early disposal will be valued at the market value of the assigned assets.

  3. Insured pension plans must offer an interest rate guarantee and use actuarial techniques.

  4. The policy conditions must expressly and prominently state that this is an insured pension plan.

  5. Policyholders of insured pension plans may, by unilateral decision, transfer their mathematical provision to another insured pension plan of which they are policyholders, or to one or more pension plans of the individual or associated system of which they are participants. Once the contingency has been reached, mobilization will only be possible if the conditions of the plan allow it.

    The procedure for carrying out the mobilization of the mathematical provision is regulated in article 49.3 of the IRPF Regulations.