Complementary pension savings

The Pacte Law of 22 May 2019 introduced a general reform of individual and company retirement savings in legal, tax and social terms. It aims to simplify and harmonize the various schemes and offers savers greater flexibility in the use of their savings. As experts in employee savings, Roederer consultants can advise you on the selection of the most suitable company retirement savings plan for your employees and your company's capacities.

Supplementary retirement savings schemes

Two types of schemes exist today:

• Compulsory retirement savings plans (PERO), open to an objective category of employees, and the collective retirement savings plan (PERCO), open to all company employees.
• Defined benefit group pension schemes, known as "Article 39".

Company pension plans

The collective company pension savings plan (PERCO) and the compulsory company pension savings plan (PERO) are supplementary company pension schemes with defined contributions. The company may set up one of these two types of pension plan or provide for a PER that includes both.

PERCO membership is optional for the employee. It does not provide for employer participation, unless it also includes a PERO.

The PERO, on the other hand, creates an obligation for all employees or for the specific category of employees defined, to join the contract. This PERO provides for compulsory payments by the employee and a contribution by the employer.

These schemes allow employees to build up savings for retirement on favourable terms. The employee concerned can therefore add to his or her individual account in various ways:

• compulsory payments under the collective agreement;
• individual voluntary payments;
• amounts from incentive schemes;
• amounts from profit-sharing schemes;
• company contributions to retirement savings;
• entitlements under the time savings account;
• compulsory payments under the collective agreement;
• individual voluntary payments;
• amounts from incentive schemes;
• amounts from profit-sharing schemes;
• company contributions to retirement savings;
• entitlements under the time savings account.

The amounts paid:

• benefit from fiscal and social advantages;
• are transferable to any other pension savings plan throughout the employee's career;
• can be paid out at retirement in the form of an annuity, a lump sum or a mixture of both;
• can be subject to early withdrawal in the event of disability, death, expiry of unemployment insurance rights or overindebtedness.

Company pension savings: defined benefit schemes known as "Article 39"

"Article 39" contracts are supplementary pension contracts with defined benefits. With this type of scheme, the employer commits to the amount of the pension paid to the employee. The contract is funded exclusively by contributions paid by the company to a defined category of employees.

The old "Article 39" contracts provided that only employees present in the company at the time of their retirement could receive the pension. Therefore, if an employee resigned or was dismissed before retirement, he or she would lose all rights acquired under the scheme. The ordinance published in July 2019 removed this condition for the new "Article 39" contracts. However, the condition of completion of the career in the company remains valid for the former "Article 39" contracts.

Would you like your employees to benefit from a pension plan? Our firm of experts in employee savings recommends the best solutions for you and your employees. Please contact us for advice on company pension schemes.