Pacte Law: retirement savings, employee savings... what's changing

LOI PACTE - From October 1, new retirement savings products will be able to be marketed in France, thanks to the Pacte law.

Pacte Law: retirement savings, employee savings... what's changing

LOI PACTE - From October 1, new retirement savings products will be able to be marketed in France, thanks to the Pacte law. We will explain everything to you.

[Updated September 30, 2019 at 9:10 a.m.] Retirement savings are changing their face with the Pacte law. In order to simplify the complex landscape of retirement savings, the executive launched the creation of the Retirement Savings Plan, also called PER. The marketing of the three products should begin from Tuesday, October 1, 2019. In detail, it is planned to launch an individual retirement savings product, simply called the Retirement Savings Plan, as well as two collective products. If you already have a retirement savings plan, don't panic. The old devices should not disappear before October 1, 2020. Find in this article all the information on these new retirement savings products and the devices that should change with the Pacte law.

To make retirement savings products more attractive, the government has decided to simplify the landscape, by creating three products under the Pacte law. The first is an individual retirement savings product: the Individual Retirement Savings Plan (PERI). It is to replace the PERP (People's Retirement Savings Plan) and the "Madelin" scheme, reserved for self-employed workers. The contracts may be opened in the form of insurance contracts or title accounts. The Pacte law also provided for the creation of two collective retirement savings products, the collective PER (PEREC) and the mandatory PER (PERO), to replace the Perco (collective retirement savings plan) and the former article 83. One of them will be open to all employees and the other will be reserved for certain categories of employees only.

As Le Revenu reminds us, each product will be divided into three compartments, depending on the nature of the payments: voluntary payments made by the saver, payments from employee savings (profit-sharing, participation, etc.) and payments required by the employee or the employer. Depending on the nature of the payments made, the terms of exit and taxation will change. Find all the information on the PER in our article.

Today, only 16% of employees benefit from an employee savings scheme within their company. The Pacte law provides for a relaxation of taxation on profit-sharing. The social package, which corresponds to the taxes paid by the employer when it distributes profit-sharing to its employees, has been abolished since January 1, 2019 for companies with less than 250 employees. For companies with less than 50 employees, the social package has been abolished on all employee savings payments (profit-sharing, participation and the employer's contribution) The State also wishes to encourage the implementation place of PERCO in companies by removing the prerequisite for the latter to have a company savings plan (PEE).

Life insurance is an investment very popular with the French. But the majority of savers place their savings in euro funds. The government wants to direct savers towards eurocroissance funds, a product launched in 2014 that has had little success. These funds are not available at all times, unlike life insurance. It offers a capital guarantee only at maturity and also contains a portion invested in shares. The financial product should be simplified. Purpose: To bring resources to businesses. The government has announced an incentive to transfer savings from life insurance to retirement savings. As indicated above, any redemption of a life insurance contract of more than eight years will allow you to obtain a tax reduction, if the sums are reinvested in a retirement savings plan and that the redemption takes place at least five years before retirement. This system is in place until January 1, 2023.


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