This collective way of companies acquiring a plan for Private Pension is considered to be an excellent benefit offered to employees since it shows the market the concern to create an alternative to guaranteeing the same standard of life during retirement of their collaborators.
Worried about their image, companies have been looking more and more to offer this type of benefit which adds value to the institution.
The Private Pension plans which can be acquired collectively are the same as the individual plans: PGBL and VGBL.
The big difference is cost because in group plans load and administration fees can be up to 50% lower than those in individual plans.
The market offers three ways of acquiring group plans:
1 - The company contributes on behalf of the employee and can set up rules to redeem values or retirement granting.
2 - The employees also contribute with the company, respecting pre-established percentages.
3 - Only employees contribute.
Keeping in mind that in individual plans the fees are higher, this type of contribution is still worth it.
According to research, the Corporate Pension Plan benefit is the second most important item when a professional is choosing a company.
On the domestic market the big companies choose the first model, considering that the contributed values can be deducted on the Income Tax Return as operational expenses off their actual profit.