Collective Occupational Pension Plans
Plans d’épargne retraite d’entreprise collectifs, PERECO
Coverage
Voluntary participation
- A company can enrol all its employees in a collective pension insurance. The plan can include all employees by default. However, the employees must be informed and be given the option to opt out.
Financing
General finances
- Fully funded personal pension plans based on personal contribution payments and capital revenues.
Contribution payments
- Contributions are primarily paid by the employee; no fixed contribution rate.
- The employer can make supplementary payments in the name of the employee.
- In total, the payments of the employer cannot exceed three times the payment of the employee or 16% of the ‘social security ceiling’ (plafond annuel de la sécurité sociale).
State support
- The sum contribution paid by the employee is not subject to income tax within a limit determined by the Code general des impôts (Art. 163 quatervicies, I, 1, d).
- The contribution paid by the employer is not subject to income tax.
- Under certain conditions, the revenue generated by the savings is exempted from income taxes.
Administration
- The plans are administrated by private insurance companies and the costs of their management must be paid by the employer.
Qualifying Conditions
- The insured person has the right to claim benefits in case of retirement; the conditions are the same as in the general scheme for employees in industry and commerce.
- Under certain conditions, the savings must be paid to the entitled beneficiaries before retirement (e.g. in case of death of the person, the sum must be paid back as part of the inheritance).
Benefits
Pension payments
- The benefit is determined by the conditions of the insurance contract.
- Lump-sum payment and annuity payment are both possible.
Taxation and social security contributions
- Payments are not always subject to income tax (especially when the benefit is paid as a lump sum).
- Payments are subject to CSG, CRDS and CASA.
Coverage
Financing
Administration
Qualifying Conditions
Benefits
Voluntary participation
- A company can enrol all its employees in a collective pension insurance. The plan can include all employees by default. However, the employees must be informed and be given the option to opt out.
General finances
- Fully funded personal pension plans based on personal contribution payments and capital revenues.
Contribution payments
- Contributions are primarily paid by the employee; no fixed contribution rate.
- The employer can make supplementary payments in the name of the employee.
- In total, the payments of the employer cannot exceed three times the payment of the employee or 16% of the ‘social security ceiling’ (plafond annuel de la sécurité sociale).
State support
- The sum contribution paid by the employee is not subject to income tax within a limit determined by the Code general des impôts (Art. 163 quatervicies, I, 1, d).
- The contribution paid by the employer is not subject to income tax.
- Under certain conditions, the revenue generated by the savings is exempted from income taxes.
- The plans are administrated by private insurance companies and the costs of their management must be paid by the employer.
- The insured person has the right to claim benefits in case of retirement; the conditions are the same as in the general scheme for employees in industry and commerce.
- Under certain conditions, the savings must be paid to the entitled beneficiaries before retirement (e.g. in case of death of the person, the sum must be paid back as part of the inheritance).
Pension payments
- The benefit is determined by the conditions of the insurance contract.
- Lump-sum payment and annuity payment are both possible.
Taxation and social security contributions
- Payments are not always subject to income tax (especially when the benefit is paid as a lump sum).
- Payments are subject to CSG, CRDS and CASA.
Legal Basis: Monetary and Financial Code, Book II, Title II, Chapter IV (Code monétaire et financier, Livre II, Titre II, Chapitre IV).