The Retirement Savings Plan (PER) is a unique system that offers two types of subscription: it can be subscribed within the company (PER d’entreprise), or individually (PER individual). Any company manager that employs at least one worker, even part-time or the worker himself, is concerned with subscribing to a company PER not only on a personal basis, but above all professionally. Company Decryption PER.
For the sake of simplification and to configure a global management of retirement savings, the law on the growth and transformation of companies, known as the PACTE law, instituted a single system, the PER, which is available in three forms, since October 1, 2019:
- the Individual Retirement Savings Plan (PER individual), open to individuals;
- the company’s collective retirement savings plan (company collective PER), open to companies, which replaces the collective retirement savings plan (PERCO);
- the Mandatory Retirement Savings Plan (PER mandatory), open to companies, which replaces the “Article 83” pension contract.
Mandatory Retirement Savings Plan
What is the mandatory PER?
The mandatory PER replaces the “article 83” retirement contract.
This is a retirement savings plan offered for membership in companies, to which employees are obliged to join as soon as they belong to the category of personnel covered by the system.
The creation of a mandatory PER offers a real social advantage for employees and a real loyalty tool.
Who are you addressing?
The company establishes a mandatory PER in a legal act that can be a unilateral decision of the employer or a company agreement or a referendum agreement. This act defines the employees involved. It can be all team members or just some categories of them (managers, workers, etc.). The category of workers benefiting from the mandatory PER must be defined based on objective criteria. The workers concerned are then obliged to subscribe to the established retirement savings plan.
What is your function?
The mandatory PER consists of 3 different compartments that offer each employee the possibility of saving for his future retirement, in addition to the payments made by the company.
1- A compartment for mandatory payments
The company funds the individual account of affiliated employees with regular payments that may be partially funded by the affiliated employee. Amounts saved in this compartment may be subject to early release in certain authorized cases such as for the other compartments (but not for the purchase of the primary residence) and may be paid in the form of an annuity upon retirement (unauthorized capital withdrawal for this compartment ).
2- A compartment for employee voluntary payments
If the employee intends to make payments on his own initiative, he can use his mandatory PER. His payments will have the same taxation as if he fed an individual PER. The amounts saved in this compartment may be subject to early release in certain cases authorized for the other compartments and also for the acquisition of the main residence (not authorized for mandatory payments compartment) and release in the form of capital and/or lifetime annuity upon retirement.
3- A compartment for saving employees
This compartment can be financed directly from employee savings (profit sharing and profit sharing distributed by the employer: provided that the associated company has set up a PER Company for the benefit of all salaried workers). It can also be financed by entitlements registered in a time savings account (CET) or, in the absence of a CET, by amounts corresponding to unused rest days, up to a limit of 10 per year.
All payments (profit sharing, participation, profit from unused vacation days or CET) made in this subfund benefit from very low taxation. These payments are not subject to income tax.
Early release cases
Amounts paid in a mandatory PER are blocked until the employee retires.
However, there are several cases of early release, which vary according to the payment compartments:
- acquisition of the main residence only for amounts resulting from voluntary payments and employee savings (profit sharing, profit sharing, consideration, TEC, etc.);
- disability of the holder, his/her spouse or PACS partner, or their children;
- death of the holder’s PACS spouse or partner;
- expiry of the holder’s unemployment insurance rights;
- over-indebtedness of the holder;
- cessation of the holder’s independent activity following a winding-up court decision.
The Collective Company Retirement Savings Plan
This product succeeds PERCO. Any company can offer a corporate collective PER to its employees, without its subscription being mandatory. On the other hand, this PER must be open to all employees. Only one condition related to seniority can be required.
The company can transform a PERCO into a PER collective company.
This PER entitles you to tax advantages and employee rights are transferable to other PERs. The expiry of the collective PER is the retirement age, but the amounts can be released in certain cases similar to the mandatory PER.
SMAvie, one of the main players in health, pension, retirement and savings insurance, offers the PER Empreendedor SMAvie*, which is a mandatory PER that allows employers to help their employees save for retirement under privileged conditions..
In addition, salaried executives or corporate directors without an employment contract can also benefit from the benefits offered by this contract, under certain conditions.
Thus, the PER Empreendedor SMAvie represents a real social benefit for employees and a real loyalty tool because it is a form of deferred salary.
Finally, this supplementary retirement scheme offers an undeniable financial interest for the company and the employee:
- For the company, under certain conditions, mandatory contributions are deductible from the corporate tax basis and employer contributions are exempt, within certain limits, from social charges (excluding the social package).
- For the employee, within the limits of certain deduction limits, mandatory payments are exempt from income tax and voluntary payments are deductible from taxable income.
* PER Entreprise, is a mandatory retirement savings plan (PERO) and a collective life insurance contract with mandatory membership, whose guarantees are expressed in euros and/or in units of account. Unit-linked products carry a risk of capital loss.
This information is based on regulations in effect as of April 14, 2022 and does not constitute legal or tax advice or advice. Advertising document, with no contractual value – Only the information notice has contractual value.
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