The Bolojan government gave examples from various countries when it took the measure to limit the withdrawals from private pensions. How is it in the “Example Countries”

Italy, Croatia, South Africa, Ireland and Poland were the models from which the government says it was inspired. How things are according to a cross -border documentation on pensions, to which Hotnews worked with publications from several countries.

• This article was carried out within the European Pulse project, a European initiative to promote cross -border journalistic partnerships. Adrian Vasilache-HotNews.ro (Romania), Marina Kelava-H—terg (Croatia), Maria Delaney-The Journal Investigates (Ireland), Oscar Gimenez Fernandez (Spain) and Tsvetelline Sokolova (Bulgaria) contributed.

In Croatia, despite the fact that the country was used as an argument by the Government of Romania when it limited the withdrawal of money through the draft law on the payment of private pensions, things are different from the list from Victoria Palace because we are taxed. And in Croatia it is not taxed.

In us, the new law stipulates that the beneficiaries will be able to withdraw a maximum of 30% of the money accumulated in pillars II and III of pensions.

The model from Croatia

In Croati, the reform of the pension insurance system started in 1999 and resulted in a change in the way the pensions of future pensioners are financed, informs the H—-.org publication in Croatia.

The Croatian pension insurance system is based on three pillars:

• Mandatory pension insurance based on generational solidarity (first pillar),
• Mandatory pension insurance based on capitalized individual saving (second pillar),
• Voluntary insurance of pensions based on the capitalized individual saving (third pillar).

The first and second pension insurance pillar are mandatory, and the third pillar is based on voluntary savings for pensions. The implementation of the new pension insurance system started on January 1, 2002.

“The total allocation rate for compulsory pension insurance (Pillar I and II) is 20% of the contribution base (gross salary) for insurance that are not subject to seniority increase (15% in Pillar I and 5% in Pillar II)”

Only 27% of Croatians save to Pillar III

Contributions for Pillar III are voluntary, and the amount is of choice. You can also be a member of several voluntary pension funds in Pillar III. The state subsidizes payments in Pillar III. The state pays 15% of the total amount paid, or up to a maximum of 99.54 euros in one year. In order to benefit from the maximum amount of incentives, you must pay 663.61 euros annually, Croatian journalists explained.

According to data from 2024, only 27% of people employed in Croatia save in Pillar III (463,365 persons or 12% of the total inhabitants).

In the Pillar II of Pensions in Croatia the pension payments are allowed in the form of: payment throughout life and payment throughout life with a single partial payment (15%).

In Pillar III, the pension in the voluntary pension savings can be paid at the same time at the age of 55 (at 50 if you have enrolled in Pillar III before 2019), whether you are retired or still employed. There is also the option of a unique payment, of maximum 30% of the total funds in your personal account, the Croatian publication shows.

Situation in Ireland: Tax exemption to lump sums up to 200,000 euros

Ireland also appeared in the motivation of the Bolojan government. In Ireland, most people can request a state pension when they reach the state retirement age (currently 66 years old).

Apart from the state pension, 67% of the workers have a form of pension coverage, according to the latest data of the Central Statistics Office (CSO) in December 2024, informs The Journal Investigations in Ireland.

Most pension workers have only one occupational pension (69%), and 11%have only one personal pension (11%). Some workers have both (21%).

For private pension funds, the percentage of the salary depends on the employer's scheme (if there) and what the employee decides to do. There are tax exemptions available for pensions, and they vary depending on the age of the person who contributes from his income to a pension.

In Ireland, the income from private pensions is taxable, being subjected to the same odds and tax tranches as the ordinary income tax. However, certain pension payments, such as lump sums (LUMP Sums) from retirement, have different tax rules.

Individuals can receive a tax exemption limit, for life, of 200,000 euros for the lump sum of retirement from all sources. The tax is applied for the income from the lump sum that exceeds this limit, as follows:

• The amounts between 200,001 € and € 500,000 are taxed by 20%.
• The amounts exceeding € 500,000 are taxed by 40%.

For public pensions, tax and contributory pensions are paid taxes, except in cases where tax exemptions are applied.

Situation in Spain: Withdrawing the whole amount at once can trigger a high fiscal obligation

In Spain, at the end of 2024, there were 10.2 million accounts of participants in private pension funds, according to data from the Association of Fund Administrators, informs the EL Confidential Publication in Spain.

This does not mean that there are 10.2 million people with a pension plan, because a single user can have more accounts. As for the individual plans, there were 7.3 million participants' accounts. The net number of people with a pension plan is estimated at eight million, although this is an estimate of the financial sector (INTRCO), explains the Spanish journalists from El Confidential.

What amounts can be withdrawn as a lump sum and how is the rest of the money from the private pension paid?

There is no limit. Pension savings can be withdrawn at the age of 65. Although in the individual plans the withdrawals can be made after 10 years, starting with 2025 this will only apply to contributions made in 2015 or earlier due to a legal change a decade ago. The withdrawals may be of the whole amount or only part of it, although for fiscal reasons it is advisable to make periodic withdrawals or to establish life rent.

In Spain, the contributions to the pension plans are deductible from the taxable basis of the income. However, all economies – including contributions and capital earnings – are included in the taxable basis of the income to withdrawal. Because the personal income tax (IRPF) is progressive, withdrawing the whole amount at once, if significant, can trigger a high fiscal obligation, El confidential shows.

How many years can the staggered payments or life rents be made? What taxes and taxes apply to payments to public and private pensions?

There is no limit for staggering the withdrawals or life rents from a pension plan. The withdrawals from the pension plans are taxed according to IRPF. Regarding public pensions, they are financed by contributions to social insurance, paid both by salary and employer, the journalists of the Spanish publication El Confidential said.

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