Pension plans; situations in which they can be redeemed

As a savings and investment product, a pension plan is one of the most attractive options for supplementing your income during retirement. One of the main characteristics of a pension plan is that you will be required to keep the money you have contributed to the plan in place until you retire (in any modality).

However, there are a series of contingencies or exceptions, where you will be able to gain access to the money you have contributed to your plan, prior to the normal retirement age. These include:

Becoming legally unemployed will allow you to gain access to the capital accumulated in your pension plan. 3 requirements must be verified:

- Being legally unemployed.

- Being registered as a job-seeker.

- Having exhausted all unemployment benefits at your contribution level or lacking the right to these benefits.

For self-employed workers, there are two requirements in order to redeem a pension plan in the event of unemployment: having exhausted the right to receive contributor benefits and being registered as a job-seeker.

The account holder will have right to redeem his or her pension plan early by verifying (via the appropriate documentation) situations of full permanent disability for the usual profession, absolute disability for all work, and severe disability.

The account holder will be able to gain early access to his or her pension plan after verifying his or her situation as dependent or highly dependent.

As in the prior cases, the status of severe illness must be demonstrated via medical certification. These circumstances for pension plan redemption also include consideration that the severe illness may be suffered by the spouse or first-degree ancestors or descendants.

In the event of the account holder’s death, the account holder's beneficiaries will be the ones to receive the capital accumulated in the pension plan. If no beneficiaries are designated, then the account holder's own heirs will be the ones to receive the money.

According to the most recent tax reforms, the account holder of a pension plan can redeem his or her capital (plus any income that may have derived from it) after the plan has been opened for 10 years, counted in all cases from January 1, 2015, which means that the first redemptions will be able to take place beginning on January 1, 2025.