The Company Retirement Savings Plan: why set it up

The Company Retirement Savings Plan is intended to complement mandatory and supplementary pension schemes.

Following the PACTE law, retirement savings plans have undergone numerous changes :

The PERCO, the “Madelin” and “article 83” contracts are no longer marketed since October 1, 2020 ;
They have been replaced by the PERI (individual retirement savings plan) and the PERE (company retirement savings plan) ;
Within the company retirement savings plans, we find the PERECO (collective retirement savings plan) and the PERO (mandatory retirement savings plan).

1/ What are the amounts that can be paid into the PER?

The sums paid into a retirement savings plan can come from :

Voluntary payments by the holder ;
Payments from employee savings schemes :
- sums paid as participation in the company’s results,
- sums paid under the profit-sharing scheme,
- sums paid by the company in the form of matching contributions,
- rights registered in the time savings account,
- in the absence of a time savings account in the company and within the limit of 10 days, sums corresponding to days of rest not taken ;

Compulsory payments by the employee or the employer, in the case of compulsory company retirement savings plans.

2/ Is this savings available ?

The sums paid into the retirement savings plan are in principle only available at the earliest on the date of liquidation of the employee’s pension in a compulsory old age insurance scheme or until the legal retirement age (art. L.161-17-2 c.séc.soc. ; art. L.224-1, al. 1 c.mon.fin.).

The manager of the savings plan must also inform the holder each year of the terms and conditions of availability of the savings (art. R.224-2 c.mon.fin.).

As an exception, the Monetary and Financial Code provides for the cases in which the sums paid into the plan may be released early (art. L.224-4 c/mon.fin.) :

1° The death of the holder’s spouse or partner linked by a civil solidarity pact ;

2° The disability of the holder, his/her children, spouse or partner in a civil solidarity pact. This disability is assessed within the meaning of 2° and 3° of Article L. 341-4 of the Social Security Code ;

3° The holder’s situation of overdebtedness, within the meaning of Article L. 711-1 of the Consumer Code ;

4° The expiry of the holder’s unemployment insurance rights, or the fact that the holder of a plan who has been a director, member of the board of directors or member of the supervisory board and has not settled his or her pension in a compulsory old-age insurance scheme has not held an employment contract or a corporate mandate for at least two years from the date of non-renewal of his or her corporate mandate or his or her dismissal ;

5° The cessation of the holder’s self-employed activity following a judgment of judicial liquidation in application of Title IV of Book VI of the Commercial Code or any situation justifying such withdrawal or redemption according to the president of the commercial court before which a conciliation procedure mentioned in Article L. 611-4 of the same code is instituted, who shall make the request with the holder’s consent ;

6° The allocation of the sums saved to the acquisition of the principal residence. The rights corresponding to the sums mentioned in 3° of article L. 224-2 of the present code may not be liquidated or redeemed for this reason..

3/ What are the terms and conditions for leaving the plan ?

The terms and conditions for leaving the plan differ according to the nature of the payments :

Type of payment	Annuity exit	Exit in capital
Voluntary payment	YES	YES
Payments from employee savings plans	YES	YES
Mandatory payments(PERO)	YES	NO

4/ What are the particularities of the PERECO – the collective company retirement savings plan ?

This new “collective company retirement savings plan” replaces the former “PERCO”.

As this plan is collective, all employees of the company can benefit from its provisions. However, a seniority condition may be required, which may not exceed three months (art. L.224-17 c.mon.fin.). This plan cannot therefore be reserved for one category of personnel.

In companies with between 1 and 250 employees, the heads of these companies, the chairmen, general managers, managers or members of the board of directors, if they are legal entities, and the spouse of the head of the company if he or she has the status of collaborating spouse or associate spouse, may also benefit from the savings plan (art. L.224-13 c.mon.fin. ; art. L.3332-2, al. 2 of the French Labor Code.).

This plan can receive voluntary payments from the employee, but also payments from employee savings.

The employer may also make payments into the plan :

Matching contributions to supplement the payments made by the employee ;
Unilateral payments: the employer can make a single payment when the employee joins the plan, or periodic payments, which must however benefit all the members of the plan.

The employer’s contributions may not exceed a ceiling set at 16% of the annual Social Security ceiling, without exceeding three times the employee’s contribution (art. L.3332-11 of the French Labor Code ; art. D.224-10 c.mon.fin.).

5/ What are the particularities of the PERO – the mandatory company retirement savings plan ?

The “mandatory retirement savings plan” replaces the former “article 83” contracts.

The compulsory retirement savings plan is set up for the benefit of either all the employees of the company or one or more categories of employees, provided that these categories are constituted on the basis of the following objective criteria (art. L.224-24 c.mon.fin.) :

membership in the management and non-management categories ;
a salary threshold equal to one, two, three, four or eight annual Social Security ceilings ;
membership in the professional categories and classifications defined by the branch agreements or professional or interprofessional agreements ;
a level of responsibility, type of duties or degree of autonomy in the work of the employees corresponding to the sub-categories fixed by the above-mentioned agreements ;
membership of categories defined on the basis of the practices in force in the profession, on the basis of specific conditions of employment or activity, or to categories falling within the scope of a compulsory scheme providing coverage for the risk concerned.

Membership in this type of plan is compulsory for employees who are beneficiaries.

The plan may receive voluntary payments from employees, payments from employee savings schemes, but also compulsory payments from the employee and the employer.