How does the Retirement Savings Plan (PER) work?

In Summary

📖 Section	Description
🌟 Introduction	The Pension Savings Plan (PER) is a long-term savings scheme introduced by the Pacte Law of 2019, aimed at encouraging French people to prepare for their retirement. It offers tax advantages, management flexibility, and the possibility of early withdrawals.
🧐 What is the PER?	The PER is a long-term savings plan that allows building a supplementary income for retirement. It involves some risk of capital loss but remains accessible to everyone.
🙋 The Individual PER	Accessible to anyone, regardless of professional status, enabling voluntary contributions at your own pace.
💰 Tax Advantages	Contributions to a PER are deductible from your taxable income, providing significant tax benefits.
🔄 Contribution Flexibility	Offers the possibility to choose between free or scheduled contributions, and is compatible with other savings products.
🛡️ Protection for Your Loved Ones	In case of death, funds are paid to designated beneficiaries, offering financial protection.
🔓 Unlocking for Major Events	Allows the withdrawal of funds for important events, such as buying a primary residence.
🧮 PER Taxation	Contributions are deductible from taxable income. The taxation at withdrawal depends on whether contributions were deducted (subject to income tax and Flat Tax) or not (exemption of capital and taxation of interests at Flat Tax).
🎚️ Management Modes of the PER	Two options: Free Management for complete autonomy in investments, or Managed Horizon, where management is delegated to professionals.
🔓 PER Withdrawal	Early withdrawal possible in cases of death, disability, over-indebtedness, unemployment, cessation of non-salaried activity, or acquisition of a primary residence.
🗝️ Retrieving Your Savings at Retirement	At retirement, funds can be withdrawn as a lump sum, a lifetime annuity, or a combination of both.
🔁 Transfer of Old Contracts	Allows transferring rights gained from old retirement schemes (PERP, Madelin, PERCO) to the PER, requiring a precise analysis of your situation.
🏁 Conclusion	The PER is a flexible and advantageous solution to prepare for retirement, adapting to your needs with diverse tax and management options.

The Pension Savings Plan (PER) is a long-term savings scheme designed to help you prepare for your retirement. Created from the Pacte Law of 2019, the PER aims to encourage French individuals to save for an additional income during retirement. Accessible to all, it offers tax advantages, great flexibility in management, and the option of early release for key moments such as purchasing a primary residence. Discover why and how this plan can fit into your retirement savings strategy.

What is the Pension Savings Plan (PER)?

The Pension Savings Plan (PER) is a long-term savings scheme intended to help you prepare for your retirement. Implemented following the adoption of the Pacte Law of 2019, this plan aims to encourage French people to save for their supplementary retirement benefits beyond mandatory schemes. However, it involves a risk of capital loss. By gradually building a supplement of income, the PER enables you to have accessible savings at your retirement.

The Individual PER

The individual PER is accessible to everyone, regardless of your professional situation. Whether you are a private sector employee, civil servant, self-employed, or unemployed, this plan allows you to make voluntary contributions at your own rhythm.

Why Open a PER?

Tax Advantages

Contributions made to a PER are deductible from your taxable income, offering you a tax benefit. By reducing your taxable income, you benefit from a significant tax reduction.

Contribution Flexibility

With the PER, you can choose between free or scheduled contributions, allowing you to save according to your financial capacity. You can also subscribe to other investment products like life insurance in parallel.

Flexible Withdrawal

Unlike older schemes, the PER offers you the freedom to select how to withdraw your funds. You can opt for a lump sum, a annuity, or a combination of both.

Protection for Your Loved Ones

In case of death, funds are paid to beneficiaries listed in the contract, providing financial protection for your loved ones.

Availability for Key Moments

The PER allows you to unlock funds for significant events such as buying your main residence.

PER Taxation

Deduction of Contributions

Voluntary contributions to a PER are deductible from your taxable income, within a global ceiling set for each member of the tax household.

Taxation at Withdrawal

Lump Sum Withdrawal

• Deductible contributions: The part corresponding to voluntary contributions will be taxed according to the progressive income tax scale. Interests and capital gains will be subject to the Flat Tax of 30%.
• Non-deductible contributions: The part related to voluntary contributions is tax-exempt, while interests and capital gains are taxed at the Flat Tax of 30%.

Annuity Withdrawal

• Deductible contributions: The annuity is taxed at the income tax scale after a 10% deduction and is also subject to social contributions at 17.2%.
• Non-deductible contributions: The annuity is taxed according to the progressive income tax scale and is subject to social contributions under the rules for life annuities for a consideration.

Management Modes of the PER

Free Management

You can invest across a range of supports, from the safest (euro funds) to the most dynamic (unit-linked funds). This management allows you to control your investments entirely.

Managed Horizon

You can delegate the management of your PER to professionals who will adjust your investments based on your profile and your retirement date. This management aims to gradually secure your savings as you approach retirement.

PER Unlocking

Early Withdrawal Cases

The PER allows early withdrawal in the following cases:

• Death of the spouse or PACS partner
• Disability of the holder, their spouse, PACS partner, or children
• Debt over-indebtedness of the holder
• Expiration of unemployment rights
• Ceasing of non-salaried activity following a judicial liquidation
• Acquisition of the primary residence

Retrieving Your Savings at Retirement

At retirement, you can unlock your funds as:

• Capital, in one or multiple installments
• Lifetime annuity, paid periodically
• Combination of both

Transfer of Old Contracts

You can transfer rights acquired under old savings schemes (PERP, Madelin, PERCO) to your PER. This process requires a detailed analysis of your contract and situation.

Transferring old contracts to the PER offers several advantages and modalités to consider:

Transfer Benefits

• Simplification of Management: By transferring your old contracts to a PER, you consolidate your savings into a single scheme. This simplifies investment management and provides a clear overview of your retirement savings.
• Flexible Exit Options: Unlike old contracts that often limited exit options, the PER permits exit via capital, annuity, or a combination, offering greater flexibility to meet your financial needs at retirement.
• Tax Optimization: The PER offers attractive tax benefits, particularly the deductibility of voluntary contributions from taxable income within legal limits. Consolidating your savings maximizes these tax advantages.

Transfer Modalities

The transfer process of old contracts to a PER must be carefully planned and executed. Here are the key steps:

1. Situation Analysis: Before proceeding, it’s essential to conduct a detailed analysis of your financial situation and retirement goals. Consult a financial advisor to assess the advantages and disadvantages of transferring each contract type.

2. Assessment of Fees: Some old contracts may impose transfer fees. It’s crucial to know these fees to avoid surprises and determine if the transfer is financially advantageous.

3. Compare Conditions: Compare the conditions of old contracts with those of the PER. Ensure that the PER offers investment options and exit conditions that meet your needs.

4. Transfer Procedure: Once the transfer decision is made, follow the transfer procedure with your retirement savings manager. Provide the necessary documents and follow the instructions to ensure a smooth transfer.

Points of Vigilance

• Holding Duration: If your old contracts have been held for over 10 years, the transfer should be fee-free. For contracts held for less than 10 years, transfer fees may apply but should not exceed 1% of the transferred amount.
• Tax Impact: Consider the tax impact of the transfer, especially if you benefited from tax deductions on contributions to old contracts. These aspects should be included in your overall retirement savings strategy.

Three Management Modes for the Retirement Savings Scheme

The retirement savings scheme (PER) offers various management options to suit different investor needs and profiles. Among these, MIF’s PER stands out for its flexibility and accessibility. You should, however, ask yourself: how does the MIF PER work?

• The MIF, founded nearly 150 years ago to manage railway workers’ retirement savings, has been open to all since 2006.
• With exclusive remote sales, it offers simple and accessible products and options, tailored for those with limited financial expertise.
• The MIF’s PER notably provides three distinct management modes.

Horizon management is pilot management, where funds are allocated to minimize risks as retirement approaches. It suits those seeking a secure approach. Mandate management, or profile-based investment, allows asset allocation according to a risk profile, whether conservative, balanced, or dynamic. It balances security and performance. Self-management, or autonomous investment, offers complete freedom in choosing investment supports. This mode is intended for savvy savers who want to fully control their investment strategy.

The MIF PER proves to be a flexible and accessible solution, offering a range of options for tailored retirement savings, aligned with each saver’s needs and skills.

Conclusion

The Pension Savings Plan (PER) is a flexible and advantageous solution to prepare for your retirement. With tax benefits, diversified management options, and the ability to unlock funds for key moments, the PER adapts to your needs. Don’t hesitate to consult your advisor to optimize your savings and ensure a peaceful retirement.

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