Business Social Security Plans (BSSP) are a type of insurance contracts, by which the company implements its pension commitments in favor of its workers with the insurer. The BSSP is the great unknown in Spain. The product is very similar to the Employment Pension Plan, with the same contingencies being covered, and same taxation as well.
The big difference between them is the guarantee offered by the insurance company, because the retirement pensions are determined initially, regardless of what happens in the coming years in the financial markets. It must be remembered that for the Employment Pension Plan, the investments of your pension fund will fluctuate until the payment of retirement, death and disability benefits.
The way to determine the retirement benefit by BSSP, is the actuarial financial capitalization, with the corresponding technical bases of the insurer, of guaranteed interest rate and mortality tables at the time of contracting. In addition, they can benefit from the participation in the financial results of the investment portfolio. This means that the benefits may be higher if the management of the investment portfolio made by the insurer has been positive, regarding the situation of the financial markets.
They are also different in the fact that the company’s relationship with the insurer is bilateral. There is no control commission. The company implements its pension commitment reached with its workers, with the insurer, simplifying the management of the payment of guaranteed benefits.
If the business situation changes over time, it will always be possible to mobilize all the mathematical provisions of the BSSP to another Business Social Security Plan contracted with an insurer other than the initial one or, also, to an Employment Pension Plan. But insured workers will be able to exercise their right of redemption, in the event of termination of the employment relationship, and mobilize their Individual Pension Plan.
The actuary and economist Jaume Quibus holds a master’s degree in Financial Economics and Accounting, a degree in Actuarial and Financial Sciences, a degree in Economic and Business Studies from the University of Barcelona and has completed the Management Development Programme at the IESE Business School of the University of Navarra. He is a full member of the following associations: the Catalan Actuarial Association, the Spanish Actuarial Association, the Catalan Economists Association, the International Actuarial Association, the Catalan Association of Accounting and Management and also a member of the IESE Business School Alumni. He was a founding partner in 1998 of the actuarial company Quibus, and is corporate member number 6 in the Catalan Actuarial Association.