pension fund redemption
Liquidation Times
The Fund's rules on liquidation request times: let's clarify
Fondapi members have the right to request advances, redemptions, and liquidations for retirement when events legitimizing the request occur.
In this regard, over time, we have noticed some confusion among members, not only due to legal limits for submitting requests (for example, a minimum of 8 years of membership to request an “unmotivated” advance) but also regarding liquidation times, i.e., the time Fondapi takes to disburse the requested amount.
It is important to clarify and make appropriate comparisons. Let’s start with ADVANCE requests.
Requests for
advances
If you leave your severance pay with the company, you can request a maximum of 70% only once.
With the pension fund, you can request up to 75% of the accrued amount for healthcare expenses, purchase and renovation of your first home – including for your children – with the possibility of submitting the request again.
Additionally, you can request up to 30% for needs that do not require justification.
- you can request an advance for medical expenses that are very serious and extraordinary immediately.
If you leave your severance pay with the company, you must still have 8 years of service; - after 8 years of membership, you can request an advance for purchasing or renovating the first home of the member worker but also for their children.
If you leave your severance pay with the company, you must wait 8 years of service, and the law does not expressly provide for advances for renovations; - after 8 years of membership, you can request advances without justification, while with the company you don’t have this option;
- the applied taxation is generally more advantageous for advances paid by Fondapi;
- it’s not guaranteed that the company will be able to grant you the requested advance: the employer can annually grant advances to a maximum of 10% of employees who request them, a number that must not exceed 4% of total employees.
If you choose Fondapi, you absolutely don’t have this constraint.
The timeframes for liquidation
Despite the more advantageous regime for advances enjoyed by Fondapi members, it’s necessary to consider that the purpose of Fondapi is to ensure that the amounts you have accrued are converted into future support that you can rely on when you can no longer count on your paycheck but only on your pension check!
This is why the pension fund is not an ATM from which you can withdraw money at will! This is precisely why it’s necessary to clarify the reasons why liquidations do not occur with the typical banking times of withdrawals (instant) or bank transfers (3-4 working days).
Every liquidation requested from Fondapi consists of several steps that are the result of the guarantee and solidity of the “individual capitalization system” typical of pension funds: the liquidation is carried out with your money, not with money “lent” to you by other members. Therefore, after you have requested any benefit from Fondapi, these amounts must be disinvested. For this operation, we wait for the unit value corresponding to the month in which your complete request was submitted (it’s like closing a balance sheet for the month), the amounts leave your pension account, and finally, they are liquidated.
The whole process takes on average 70-80 days, due to tax obligations, preparation of the liquidation statement and the C.U., and the fact that the Fund manages thousands of benefits together, not just yours. In any case, it’s a time significantly shorter than the legal requirement of 6 months for liquidating redemptions.
N.B. to be certain that the benefit (redemption/advance/retirement) will be disinvested with the unit value of the month in which the request was completed, it is necessary for it to be received at least 7 working days before the end of the month; otherwise, due to the timelines related to the procedure, the practice might take the unit value of the following month.
Fondapi is not an ATM
The purpose of Fondapi is to provide you with future support.
individual capitalization system
The money with which we pay the requested benefit is actually yours and is not “lent” to you by other members.
70-80 days
The average time Fondapi takes to disburse the benefits requested by members (starting from the date of receipt of the request complete with all necessary information).
Comparison with company liquidation times
But when talking about times, it’s necessary to make appropriate comparisons with your usual situation.
If you leave your severance pay with the company, the company will have to pay you the “liquidation” in your last paycheck, so about a month later.
Pension fund
- 70-80 days;
- Advantageous taxation of:
- 23% for redemptions before retirement and advances for first home or unjustified needs;
- 15% – 9% for retirement liquidation and advances for healthcare expenses;
- higher returns than the simple revaluation of severance pay left with the company;
- Throughout the contribution phase, you have benefited from:
- additional contribution from the company;
- tax deductibility of payments to the pension fund;
- Certainty of liquidation times.
company
- 30-40 days;
- Ordinary taxation with marginal IRPEF rate:
- higher than 23%;
- Average severance pay revaluation lower than pension fund returns;
- Absence of additional company contribution;
- Liquidation times depending on company availability.
And finally, one last consideration: let’s keep in mind the concept of “necessity”.
If you don’t have a real need for money, it’s not advisable to request a benefit from Fondapi because, although all disbursements other than retirement are treated with a more advantageous tax regime compared to the same amounts requested from the company, it is only after retirement that the most economically advantageous results are achieved.
