September 28, 2020

Saving for Retirement: The Best Pension Plans

Over the last few years, trust in Social Security has been greatly diminished and more and more Spaniards have a retirement savings plan in mind. However, it is also easy to get lost in this maze of product offers that aim to cover this need. Which entities offer the best pension plan?

In this text we will analyze the best pension plans for each type of saver, keeping in mind the basic aspects of each person, to know how to determine their retirement plan.


These plans are a voluntary savings system and complementary to the basic public system model. Subscribers of this product can supplement their public pension, to which they were entitled to the income or capital generated by their pension plan, they are not exclusive models.

The Public Administration itself (in line with the European Commission) is the driving force behind this private savings model, creating a beneficial fiscal framework for the participants. Thus, one can also appreciate the importance of complementing the public pension, with a private savings instrument.

The reasons are very evident, but all of them derive from a main demographic factor: The progressive aging of the population.

This phenomenon raises more than concern about the future of our public pensions:

  • The retirement age will be delayed.
  • The contributions of the active population to the public system will be less and less.
  • Citizens will not be able to maintain the same standard of living after their retirement (the distance between the salary and the public pension is progressive).

And a few more. Not counting varied situations that may occur (such as not contributing enough or not receiving benefits for the excess of listed years).

In short, each future retiree can only maintain an adequate source of income, being careful to sign a retirement plan during their active stage.


Compared to other more liquid products such as investment funds, pension plans constitute long-term savings. The risk of each plan translates into its volatility and it is not convenient to think in terms of great short-term returns. In this case, the time horizon of the investment (usually long term) should set the course of it.

Although, of course, it all depends on the factors of the saver, such as:

  • Age
  • Capital that can be contributed gradually
  • Medium and long-term financial needs
  • Dependents
  • Risk tolerance
  • Investment Experience
  • Profitability Expectations
  • Ability to generate income and personal financial situation

Each person must make an introspective analysis of their characteristics as an investor/saver, it is about reflecting on these characteristics which are the most convenient model.

The conclusions drawn after this first analysis will serve to frame each saver in a certain profile, as far as the risk / return binomial is concerned. Recall at this point that all returns are associated with a risk.

As an example, profiles could be segregated schematically (from least to greatest risk aversion):

  • Conservative
  • Moderate
  • Balanced
  • Dynamic
  • Aggressive

In general terms, the Association of Collective Investment Institutions and Pension Funds (INVESCO) sets classification criteria for pension plans, according to their investment nature (and therefore their risk-return):

  • Guaranteed: Plans for which there is an external guarantee of a certain performance, granted by a third party.
  • Short Term Fixed Income: your portfolio cannot have Variable Income assets and its average duration must be a maximum of 2 years.
  • Long Term Fixed Income: idem but with an average duration of more than 2 years.
  • Mixed Fixed Income: you can have up to 30% of the portfolio in Variable Income assets.
  • Mixed Variable Income: portfolio composed between 30% and 75% for Variable Income assets.
  • Variable Income: minimum of 75% of Variable Income assets in a portfolio

With this classification in hand, and determined the previous questions, we have all the necessary aspects to design our retirement plan.


Retirement plans are financial products that fulfill a specific function and are therefore highly regulated and supervised by the control agencies. These organizations require that their investments be sufficient and duly diversified at all times.

As we have been observing, there is no single factor to determine which are the best pension plans. Yes, we can establish the maximum that this plan, like investment funds, should obtain a risk-adjusted return in a sustained manner over time.

Currently, and according to each saver profile, the best pension plans are:

Moderate Variable Income (Mixed Variable Income)

Ideal for balanced profiles, moderates also dare to assume a higher risk in their basket of pension plans with these portfolios. Within this category, the 2018 Morningstar Award for the best Mixed Pension Plan stands out. Awarded to Futurespaña Savings Forecast PP.

With 44% of its equity in shares (Variable Income); An Aggressive Mixed Equity Policy in Euros and compensated with 26.73% in Monetary assets and therefore a medium-high risk, offers an annualized return in the last three years of 7.42%.

It invests in securities quoted in markets of OECD countries, however, it mainly composes its portfolio with eurozone values.

The managing entity of this pension plan is Caja España Vida Seguros y Reaseguros. With maximum commissions of 0.40% (management and deposit). It requires periodic minimum contributions of € 30.

The best Fixed Income Pension Plan

Returning to the Morningstar 2018 awards, this independent analysis provider awarded the best Fixed Income Pension Plan to BS Fixed Income Plan PP.

This retirement savings product is intended for conservative investors because its portfolio consists mostly of long-term European Fixed Income assets, inflation-linked bonds, and deposits. All of them with good credit quality. There are no limitations for the duration of the portfolio.

The revaluation of the plan reflects the accumulation of interests and the evolution of the prices of investments in the market.

This product is managed by Bancsabadell Pensiones EGFP. With an annualized return of 1.53%, in these last three years, and a volatility of 4.53%.

Aggressive (Variable Income)

For those who love Variable Income, for the most determined, those who have a lower risk aversion. This category has also been awarded this year.

In this case, the factors to be analyzed (in addition to profitability), are the market situation where you invest, your sector, the geographical area, the currency in which the assets are denominated, among other factors. Therefore, the best pension plans in this modality (the riskiest in the universe of retirement plans) are two: one of European Variable Income and another of Global Variable Income:

  • OpenBank Variable Income Europe PP: a minimum of 60% of its portfolio placed in eurozone securities, with solid fundamentals. Compensated with short-term Fixed Income values. It shows an annualized return in the last three years of 7.65%. The profitability in the last 12 months is 26.89%.
  • Mundiplan Audaz Global PP: managed by AXA Pensiones EGFP, this Plan makes its investments according to a prudent criterion of risk diversification. Stock selection is done with a medium and long term horizon. The annualized three-year return is 11.76%.

Defensive Mixed (Mixed Fixed Income)

In this segment, there is no awarded plan. However, a few years ago, it was the most numerous category in terms of plans with five Morningstar stars.

This gives us information on how confidence in the markets has been increasing and currently the savings flow towards pension plans with greater risk-return.

Some of the best pension plans in this category are:

  • Global Merchbanc (Global Flexible Mixed Fixed Income)
  • Orange 2050 (Mixed Fixed Income managed by Rent 4 Pensions)
  • Abanca Professionals (Mixed Fixed Income Conservative Euro)

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