"Created in 1988 BBS Abogados Asociados Asesores Legales y Tributarios specializes in all the fields that make up the law of the company."
Barcelona lawyers who are experts in pension plans, we help you rescue your pension plan. Obligation of transparency of the entities in the plans.
What is a pension plan?
A pension plan is a form of savings that individuals can take advantage of, consisting of periodic contributions, which will make said individuals have a capital or income in the future in the event of retirement, unemployment, disability or death.
In what ways can I redeem a pension plan?
- In the form of capital: The beneficiary receives the total amount of the plan in a single payment.
- In the form of periodic income, which can be of different types, such as temporary or life-long.
Entities' duty of transparency in pension plans
In a recent ruling, the Supreme Court has established jurisprudence on transparency in pension plans.
According to the High Court, the entities must inform consumers with absolute transparency about the rights of the participants and the different methods of collection of benefits, whether it is the perception of capital in a single payment, guaranteed income or financial income whose amount or duration does not are guaranteed.
Obviously, each payment method has its advantages and risks, so the choice of how to collect will depend on the specific needs of the beneficiary. For this, it is necessary for the owner to have knowledge of the risks associated with each modality.
I was not informed that the plan was terminated in the event of the owner's death.
Practical example: STS 40/2019
A father of a family, at the time of retirement (2003), chooses to collect the pension plan in the form of periodic and fixed income for a period of 15 years, designating his wife as the beneficiary in the event of death. However, in 2008 the owner’s wife died, and in 2010 the same owner died.
Consequently, the daughters request that the payment of the rents be maintained for their benefit until the end of the 15-year term, that is, until 2018, as the owner had decided. However, the entity refuses, because according to it the benefit was extinguished with the death of the owner and his wife.
In this way, daughters go to court:
In the first instance they agree
The Provincial Court revokes the sentence, and declares that they have no right to collect the claim.
The Supreme Court rectifies the resolution of the hearing, and agrees that the daughters must collect the benefit.
What are the arguments of the Supreme?
In summary, the two High Court reasons are two:
- For justice, because if, for example, the owner agrees to collect the plan in the form of a periodic benefit and dies the next day, there would be an unfair enrichment by the entity.
- Due to lack of transparency and information on the part of the entity. In particular, the entity failed to demonstrate that it provided the owner with the proper information regarding the consequences of the death prior to the agreed term. In other words, it did not inform you if said death would mean the loss of the outstanding amounts. Likewise, the court emphasizes that the aforementioned information must be provided in writing and in a clear and understandable way.
In short, in this case, if the owner of the plan had been correctly informed about the consequences of a death before the agreed deadline, he or she might have opted for the other method of payment (one-time payment). For this reason, the court guarantees the right of collection of the daughters.