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In these troubled times, a return on money is the objective of all who have savings. However, the global crisis has created between rock and a host of financial products. Investors are no longer willing to risk more than necessary and in most of the time choose to flaunt her conservative profile preferring the safer option.

Under pension plans, this theory has been amply demonstrated. According to a survey by the Centre Inverco, all the managing bodies of these products believe that the crisis has meant that the participants have become more conservative. And to show a button. In 2011, investors have opted to hire guaranteed plans (to ensure all the capital invested and have an associated interest rate may be fixed or variable) or transfer its assets to fixed income plans (which invest in bonds and securities with fixed income).

The yield , though, is one aspect that is sacrificed for safety. According to the data handled Inverco until November 30, 2011, the weighted average annual return of guaranteed pension plans is 2.87% for a term of ten years. Plans for short-term fixed income remunerated at 0.52% a year, or 0.60% at three years, 1.10% and five years and 1.29% for ten years, while income Long-term fixed interest rate is negative at one year (-1.17%), from 0.71% at three years, from 0.95% at five years and 1.26% for ten years. In other time periods, profitability increases. Specifically, fixed income plans in the short and long term give a 4.43% and 4.67% at 21 years respectively. The mixed fixed income offering negative returns at one and five years, paid a three-year 0.40%, 0.58% at ten years and 4.59% at 21 years.

And, according to the consultees for Inverco, the most valued aspects of pension plans and savings product are, in this order, its taxation, security and transparency, profitability and liquidity.
The importance of planning for retirement in any case does not go unnoticed. All respondents considered necessary to encourage savings in pension plans to supplement for retirement, but note that its penetration rate in Spain is low compared with other European Union countries and, to grow in the market should improve its taxation, implement reforms in the public and provide them with greater liquidity.

Profile of the participant
As explained Inverco, 60% of participants in pension plans are male and 40% are women. Also in Spain the average age is between 40 and 60 years, and in hiring plans, the branch network is the most used, at the expense of telephone and Internet banking.

85% of the participants made ??an average of contributions less than $ 10,000 annually. Specifically, 19% do so in quantities less than 2,000 euros, 36% contribute between 2,001 and 5,000 euros and 30% between 5,001 and 10,000 euros.

The supply of savings-pension is very wide and varied and this time also includes a showcase in which a part of the entities display their gifts and incentives promotions. Other managers dismiss this strategy and emphasize the profitability of their products.

As all agree is the recommendation that customers do not leave your decision for the last minute. Surprisingly, “every year there are participants who transact their contribution, the last day of the year and find they can not apply the tax deduction in that year, since the operation failed to materialize until two days later by the transfer of money that goes into the plan, “said Ricardo Gonzalez, Commercial Director Mutuactivos, a subsidiary of Mutua Madrilena.
Contributions to pension plans and pension plans insured (PPP) are deducted from the taxable amount of income tax. This is a direct benefit to the taxpayer can obtain a saving of between 24% and 43% of your contribution. High rents are what get more tax returns.

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Products
are on the market about 1,250 private plans in addition to the insured pension plans, life insurance similar to private pension funds, which gradually gain adherents in an environment of high market volatility.

Which product to choose as broad a catalog? Experts agree that future pensioner’s age is a factor. Most young people should go to equities, as they have enough time to absorb the potential fall and, ultimately, the profitability can be obtained is the largest available in the markets, “said Wolfgang Kania, head of Deutsche Bank plans.

At the other extreme, those closest to retirement should be placed into more conservative, says Rosa Bueno, Director General of Europensiones, a subsidiary of Banco Popular. Plans with guaranteed and insured pension plans are most appropriate for this type of savers. “The ideal is to sign one whose expiration date matches the participant’s retirement,” says Javier Sanchez, head of Citibank pension plans.

Risk profile
Anyway this is the general recommendation, but we must also take into account the risk profile of the investor and his ability to fit periods of losses.
What matters is what is contracted and accept the consequences.
The market volatility living immersed in the international crisis of both fixed income and equity, blanched left much of the savers who do not want to take risks. So many managers have launched such a product in its pension fund or pension plan assured (PPP). Despite this trend, the CEO of Ibercaja Pensions, Rodrigo Galan said that hiring a guaranteed “rather than a recommendation from the institution, we see that is a customer demand. We believe that in any case this kind of products should complement and diversify with others who invest in emerging, for example.”

In La Caixa share this vision. In the current environment “our recommendation is that the client blinde a percentage of their savings, which can be around 80% in a guaranteed or insured pension plan and the remainder placed in higher risk products,” says Joseph Antonio Iglesias, marketing director SegurCaixa Holding. He adds that the crisis that forces the Spanish debt to pay high interest rates is benefiting the investor.

Taking advantage of this situation, “we have launched several pension plans insured at different times and which expires in twenty years we offer a 5% annual return,” says Iglesias.
In Caser, director of life and pensions of individuals, Manuel Alvarez, corroborates the pull of the guaranteed and products that invest in deposits due to rising interest rates long term. In point of equity, Alvarez dismisses the long-term investment in the Ibex 35 but bet by emerging and geográficam diversification, with special reference to Latin America and Asia.
The commissions charged by the plans is another point to bear in mind, especially if you purchase a product fixed income money where low profitability could disappear by applying this cost, point in Citibank.
The full list of recommendations with the convenience, in which all experts agree, to make periodic contributions rather than bulky extraordinary disbursements. Thus, “it is easier to diversify risk and take the good times of the market”, points in Mutuactivos. Unanimity is also total in saying that you should never decide to transfer from one plan to another with the sole discretion of the gift offered by the manager, which is common at this time.

Profitability
Profitability is another major factor to consider when selecting a product. The intensification of the market crisis of debt and equity has placed the private pension plans back into the red zone one year, which was released in July 2009. Between last November and December 2009, the losses amount on average to 1.38%.

Despite this negative figure a bunch of plans has high returns. The equity are recorded the highest gain, which comes to 31.15% in the case of Private PlanCaixa Emerging stock, which lies 95% of its assets in equity funds Through Tempelton Franklin and JP Morgan, mainly.

Global Bestinver, with 224 million, is the plan more equity capital, and a return of 18.52% in the last twelve months. This manager, say their investment strategy, with purchases of shares of companies whose price is below the value estimated by the entity, with a forecast of future increases, fits perfectly into the pension plans are long term products. Read the rest of this entry »

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