An issue that is usually controversial in the workplace of companies refers to the compatibility of the retirement benefit with the status of administrator, member of the Board of Directors or even majority shareholder of a company, and who receives compensation. for these concepts

Let's imagine a retired person who is at the same time a member of the Board of Directors of the company of which he is a 50% partner. Only performs functions that cannot be delegated to the Administrative Body (in practice it only signs the Annual Accounts and attends the Meetings) and is unrelated to everything that involves management, administration and ordinary management of the company (never carries out activities that involve direct intervention in the management of the company). Consequently, he does not contribute to any Social Security scheme.

It is planned to remunerate the entire Board of Directors. Is collecting the retirement benefit compatible with the consideration for performing the functions indicated above as a member of the Board of Directors? Could it be charged for allowances? Should all Council members earn the same amount?

The general rule is the non-compatibility of retirement pensions in their contributory form with the work of the pensioner in terms of regulated benefits. in art. 213 Royal Legislative Decree 8/2015, of October 30, which approves the consolidated text of the General Law of Social Security.

However, for the members of a Board of Directors or the Administrators of an entity, the enjoyment of the retirement pension will be compatible with the maintenance of ownership of the business of the Company of which concerned and with the performance of the functions inherent to said ownership.

Article 93.2 of the Order of September 24, 1970 points out that "the enjoyment of the old-age pension will be compatible with the maintenance of ownership of the business in question and with the performance of the functions inherent to said ownership". Furthermore, the doctrine established by the Supreme Court determines that the retirement pension is compatible with the mere maintenance of ownership of a business, as long as That person performs only the functions inherent to that ownership and that, therefore, do not imply a dedication of a professional nature.

The formula to combine the retirement pension with being a member of a Board of Directors or Administrator, and having effective control of the company, is that the directors and business administrators perform the inherent functions to the ownership of the business, but not those of direction or management within the Company.

In short, although the free or paid nature of the position of administrator or director, in itself, is not relevant for the purposes of making its exercise compatible with the receipt of the retirement pension, it is definitive that the person retired member of the Council does not carry out any activity that could lead to her mandatory registration in any of the Social Security regimes, since it is precisely this registration that is incompatible with the receipt of the retirement pension.

Given the above, it is important that the remuneration system for the aforementioned position in no way consists of a fixed and periodic assignment (monthly, quarterly, annual, etc.), but rather, to be compatible with the receive from your retirement pension, it may only consist of a certain amount for attendance at each of the meetings of the shareholders' meeting or the board of directors, that is, as attendance fees. And the fact is that fixed remuneration, not linked to attendance at meetings, leads to the assumption that the director carries out some activity beyond those inherent to the position and that cannot be delegated, which would imply his mandatory registration in the corresponding regime and incurring, therefore, in the consequent incompatibility.

It must be taken into account that the receipt of the retirement pension is compatible with the performance of self-employment, whose total annual income does not exceed the Minimum Interprofessional Salary (SMI), calculated annually. Those who carry out these economic activities are not required to contribute to Social Security benefits and will not generate rights to Social Security benefits. That is why the recommendation is that the interested party be prudent in the amount of these allowances. If they are high (for example, they exceed the minimum interprofessional salary on an annual basis), Social Security could consider that they are incompatible with the pension (art. 213.4 LGSS "4. The receipt of the retirement pension will be compatible with the realization of self-employed work whose total annual income does not exceed the minimum interprofessional salary, calculated annually. Those who carry out these economic activities will not be required to contribute to Social Security benefits. The activities specified in the previous paragraph, for which contributions are not made, will not generate new rights to Social Security benefits).

Should all Council members earn the same amount?

Indeed, and although there is no legal obligation for them to be equal, it would constitute an indication of good faith on the part of the members of the Council because if there is evidence of an agreement through minutes that the per diems consist of x euros for all members of the equal advice somehow distorts the possible remuneration of the position.

Attention. Retirement can always be made compatible with this position, meeting the remuneration and category requirements indicated here, for which the corporate bylaws must be analyzed to review whether they should be modified in order to comply with this type of remuneration for directors.

You can contact this professional office for any questions or clarifications you may have in this regard.