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Article | Global News Briefs

Spain: Amendments to the laws on pension plans and collective dismissals

By Pilar Garcia-Aguilera | August 25, 2023

Spain boosts access to pension plans to support temporary workers and partial retirees, among others, and adds notice protections for workers facing dismissal due to a workplace closure.
Retirement|Ukupne nagrade |Health and Benefits

Employer Action Code: Act

Among other things, Law 668/2023 establishes implementing rules on sectoral tax-qualified simplified employment pension plans (planes de pensiones de empleo simplificados – PPESs); entitles temporary workers to participate in tax-qualified pension plans; and allows partial retirees to continue to contribute to their plans until full retirement. The regulatory framework for PPESs was established in July 2022 (see this Global News Brief - Spain: New tax incentives, sectoral pension and funding options). Separate legislation, Royal Decree 608/2023, creates a new six-month notice requirement for closures of workplaces involving the dismissal of 50 or more workers.

Key details

The following provisions apply to all tax-qualified plans, effective July 21, 2023, unless noted otherwise:

  • Where offered, access to a tax-qualified retirement plan must be extended to all employees, including temporary workers. The maximum waiting period before an employee can join such a plan was changed from two years to one month, as of July 2022.
  • Plan members who have taken partial retirement and commenced receipt of plan benefits can continue making contributions to the pension plan for retirement purposes (previously such members could only continue to contribute for the death benefit). Under partial retirement, employees can receive an occupational retirement benefit, as well as a social security benefit, while continuing professional activities.
  • In the event of a corporate merger or acquisition where an entity becomes the sponsor of two or more pension plans, the employer and employee representatives may jointly file for an extension of the 12-month deadline for consolidating the plans (including all participants and vested rights) under a single plan. Previously, there was no formal process to apply for an extension, despite the deadline often being missed in practice.
  • For PPESs, the amendments:
    • Require plan monitoring committees to meet at least twice a year, effective July 21, 2024.
    • Specify the procedures for converting an occupational pension plan to a PPES.

Royal Decree 608/2023, effective July 13, 2023, creates a new requirement for companies to provide at least six months’ advance notice to the central government, local labor authorities and representative labor unions of any intent to close a workplace or company involving the dismissal of 50 or more workers, followed by consultations with affected employees after the notice period has elapsed.

Employer implications

Around half of employers surveyed by WTW provide supplemental retirement benefits for their employees in Spain. Companies offering such benefits should review the new rules on pension plans and PPESs. The six-month notice requirement for collective dismissals for the closure of a workplace or company may be intended to encourage employers to consider less drastic measures for their business.


Pilar Garcia-Aguilera

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