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Saving for your retirement

A retirement savings plan, which you can take out through your job or individually, is a way to add on to your compulsory basic and supplementary retirement pensions. Retirement savings plans come with tax and contribution incentives.

There are many different types of retirement savings plans.

You can open an individual Popular retirement savings plan (PERP) by signing onto an insurance contract that was concluded between an organization providing oversight, the Popular retirement savings group (Groupement d’épargne retraite populaire/ GERP), and an organization providing management, which can be an insurance company, a providence fund, or a mutual fund.

PERP contributions are deductible from your taxable income up to a maximum amount of 10%.

You are free to set your own contribution rate. Once you have stopped working, you will begin to receive an annuity, which is the only exit option.

                For more information on PERP, please refer to the French government’s website (in French)

The Company retirement savings plan (PERE)

This is a compulsory group contract better known as the “Article 83 plan,” which is a reference to the French tax code.

These plans are managed by insurance companies, providence funds, or mutual funds. Based on an employer’s unilateral decision, a collective decision by the employees, or a collective agreement, membership is compulsory, as are payments at a rate that was set when the plan was created. Employers usually help to fund these plans.

As long as they comply with the security and transparency rules that apply to the PERP, the same tax incentives apply to voluntary contributions into these schemes. Optional contributions or one-time payments into these company retirement savings plans are income tax deductible under the same rules as for the PERP.

As with the PERP, the only exit option is an annuity once you have reached retirement age, except under special circumstances.

 

The collective retirement savings plan (Plan d’épargne pour la retraite collectif/ PERCO).

This is a collective savings plan for company employees. Membership is compulsory if an agreement has been signed. Unlike the PERE, employees are free to choose their payment rates. As with the PERE, payments are matched by the employer and the funds are invested in a pooled management scheme generally involving banks, insurance companies, or French pensions and savings organizations.

There are tax incentives for both the company and the employee. Exit options are either a lifelong annuity or a one-time payment. In this aspect, PERCO more closely resembles a standard investment than a retirement savings plan. Small companies that are unable to set up their own PERCO can join a multi-company PERCO created by a sector-specific agreement that allows management and risks to be shared.

                For more information on the PERCO, please refer to the website service-public.fr (in French)

“Madelin Law” contracts are available to all self-employed and private-practice professionals: directors with a majority share, artisans and craftsmen, private-practice professionals, and contributing spouses (“conjoints collaborateurs.”).

To be eligible, your contributions to the compulsory health insurance and pension schemes must be up-to-date. Contributions are deductible from your earned income and you are free to determine your contribution rate within a given upper and lower limit.

Your contract can be terminated if you stop working due to court-ordered liquidation or due to disability.

Once you have stopped working, the only exit option is an annuity, unless you are receiving a disability pension.

The Préfon plan is only available to civil servants, their spouses, and anyone who has been a civil servant during his/her career.

The applicable tax rules are the same as for the PERP.

                               For more information, please refer to Préfon-retraite’s website (in French)

For personalized information based on your pension schemes, please log into your pension account.

You can also use this account to :

  • access your career history
  • and estimate your pension entitlements

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