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Practical manual for Income Tax 2023.

3. Premiums paid to insured pension plans

Insured pension plans, whose premiums may be subject to a reduction in the general tax base, are legally defined as insurance contracts that, in accordance with article 51.3 of the Income Tax Law meet the requirements:

  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, whether total or partial, 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).

    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.