Co-founder of Affari Miei
10 Maggio 2024
Are you looking for a targeted investment for yours pension? Il PIP Forward-looking Generation Of General it might be right for you.
Pension funds and individual pension plans are certainly the most obvious solutions for those with social security needs, but each product must be analyzed individually because it could hide unexpected disadvantages.
In fact, today we will see together the characteristics, costs, risks, advantages and disadvantages of this product and, at the end of the review, you will also be able to read my opinions about the supplementary pension.
Let’s start!
This article talks about:
A few words about Generali Italia
I always start the reviews with a small presentation of the insurance company in question, because you need to be sure of the solidity and integrity of who will safeguard your savings for many years.
What can we say about General? First of all, it has a history almost two centuries long: it was founded in Trieste in 1831 and since then it has grown considerably to become one of the main insurance companies in Europe and in the world – it is present in over 60 countries, with 76 thousand employees and 55 millions of customers.
In Italy alone, Generali represents approximately 15% of the insurance market, the offer of services covers all key sectors: pensions, protection, investment and savings. The Group is certainly solid and is among the best in the sector.
Is Generazione Previdente a safe investment?
No doubt General it is a solid and safe institute, but can we say the same about the product we are about to analyze?
First of all let’s say that when it comes to investments, the safety it is relative.
If you join this PIP know that your savings become part of the fund’s assets, which has the objective of safeguarding the capital but above all of increasing or at least preserving its value over time.
The savings are therefore collected in several investment sectors freely chosen by each customer – those who choose the share sector aim for potentially high returns but accept greater risks, those who opt for the more prudent sectors certainly do not eliminate the risks but will have a more calm and with fewer surprises.
So, the investment is not risk-free (also because there are no risk-free investments) but you can adapt it to your needs as a saver.
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Here are the characteristics of Generazione Previdente
Foresighted Generation it’s a individual pension plan which helps you to flexibly build tomorrow’s pension to complement the public one, paying each year the amount best suited to your needs, and if you are an employee you can contribute by paying the TFR flow.
I wrote a item on purpose regarding where it is best to allocate it, whether to the pension fund or whether to leave it in the company, take a look at it.
You will be able to choose between 4 financial pathsbased on internal ESG funds and you will also be able to choose a path that will offer you the possibility of optimizing your investment.
This product also allows you to benefit from important tax advantagessaving on your taxes, during the accumulation phase and once you reach retirement.
The investment lines
As I mentioned before, you can choose between different investment lines:
Generali Sustainable Action Internal Fund: it is a share fund suitable for those who have a long time horizon beyond 15 years after retirement. The management, mainly intended for those with a medium risk appetite, has the objective of growing the capital invested over a long time horizon through investment in global stock markets;
Generali Sustainable Choice Internal Fund: this fund is instead suitable for those with a medium/long time horizon, between 10 and 15 years after retirement, and the category of the fund is balanced flexible. This is an investment designed for those with a medium/low risk propensity, in fact the portfolio is invested 40% in bonds and 60% in shares;
Generali Internal Fund Objective Protection: this sector is also flexible balanced, although in this case it leans more towards bond investments, which occupy almost 90% of the portfolio, compared to 10% in stocks. Management is intended for those with a medium/low risk propensity, with the objective of growing invested capital over a medium time horizon and protecting at least 85% of the maximum value reached by the fund from the launch date;
Separate Management Gesav Global: here we are in separate management, so it is a guaranteed sector. The management policy adopted aims to maintain the purchasing power of the invested capital. This type of fund is suitable for those with an average time horizon, with a time horizon between 5 and 10 years.
When you will receive the money
When you meet the requirements for access to the compulsory pension you are finally entitled to feel also the supplementary pension, in the form of a lifetime or capital annuity (limited to 50% of the total accrued).
If you choose the annuity this can be immediate, i.e. paid in installments for the rest of your life, or reversible, in the event of death (I know it’s not a pretty picture) a set percentage will be paid to the designated beneficiaries. There are also other options that you can read about in the specific documentation.
However, if during the accumulation phase you need liquidity for serious health expenses, the purchase of your first home or other exceptional personal needs, you can do request of partial advances of the service, within the limits established by the regulation.
In serious work situations, such as the onset of unemployment with consequent cessation of work, it is possible to draw on one’s capital in advance thanks to the temporary advance supplementary annuity (RITA) which provides for installment payments made until retirement age is reached.
And PIP cost
Let’s now look at the most important part, that of costs.
There are no membership costs to pay, although 4.50% of the member’s contributions, employer contributions, salary withholding contributions and severance pay contributions must be paid. These costs are deducted at the time of each payment.
Then we have the management costs, which are different for each sector:
Generali Sustainable Action: 1.90% of assets on an annual basis;
Generali Sustainable Choice: 1.65% of assets on an annual basis;
General Objective Protection: 1.45% of assets on an annual basis;
Gesav Carel: 1.30% retained from the annual management return.
If the yield of the separate management is equal to or higher than 4.10% and lower than 4.20% (yield range), the retained value defined above is increased by 0.02 absolute percentage points. For each further equal yield interval of one tenth of a percentage point, this value increases in the same amount.
As regards the expenses for advance, transfer, redemption and reallocation are not foreseen.
Per reallocate your position, i.e. to make a switch, you will pay €60, while the money to be paid to obtain the RITA (temporary advance supplementary income) will be a one-off €20.
Redemption and transfer
Let’s now see what the conditions are for this to redeem the pension position accrued ahead of time:
You can request partial redemption, up to 50%, in the event of redundancy, redundancy or cessation of work which leads to unemployment for a period between 12 and 48 months; You can ask for total reimbursement if permanent disability occurs (another bad image, I know, sorry) which compromises or cancels your work activity; You can fully redeem the individual position and transfer it to another complementary pension plan if at least 2 years have passed in the Fund.
The tax advantages
What do the much talked about tax advantages of supplementary pensions consist of?
Supplementary pension schemes actually enjoy a favorable tax regime which mainly consists of the deductibility of contributions paid from the overall income, up to €5,164.57 per year.
The flow of TFR conferred is not considered in the calculation of the limit, while any contribution paid by the employer must be included. In the case of registration in multiple complementary forms, the total sums set aside annually must be taken into account when calculating the deduction.
In this regard, I recommend you read the Affari Miei article: “How to Pay Less Taxes by Taking Advantage of Pension Funds”.
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GenerAzione Previdenza: Opinions of My Affairs
To conclude, it is worth the PIP Of General?
As often happens, there is no one-size-fits-all answer, it depends on the saver’s needs, especially with regards to the part relating to costs and return prospects.
In the end the best thing is to make a direct comparison between this product and other forms of complementary pension.
Since I personally invest my savings in other ways, that is, without relying on packaged products that mix a bit of this and a bit of that, and above all I invest where I manage my money, I also want to give you some alternative ideas…
In fact, know that it is possible supplement your pension also in other ways, without necessarily having to rely on a similar product.
An investment activity that you carry out yourself, dealing directly with the management of your money, with the aim of having a reasonable income for when you are elderly, may very well be enough.
Supplementary pension, the pros and cons
There are certainly people for whom a pension fund is convenient, both for the tax advantages, which make this type of product better than a normal life insurance policy intended for savings, but also for the convenience of managed savings, which allows you to forget about your investment for years, patience with management costs, if one has the money to spend…
But there are also many other savers who instead head towards this solution only due to a lack of different perspectives. Costs, constraints and lack of control over the investment are aspects of great relevance, it depends on your point of view.
All these points must be kept in mind when deciding. To help you I dedicated an entire article to the topic: “Is the supplementary pension worth it?”
Conclusions
Generali Global pension fund of Generali Italia: we have analyzed this offer overall, now it is up to you to make the best choice for your future, and I certainly cannot know what it is, the only thing I can continue to do for my readers and offer quality content that helps them grow financially!
If you need to acquire a strategy for saving and investing, within your reach, start reading the personalized guides of My business:
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