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PER: What is the retirement savings plan?

The retirement savings plan (PER) is a financial investment that allows you to save to complement your retirement, benefiting from tax advantages. We explain the essentials to understand what a PER is!

personal retirement savings plan

Established by the PACTE law, the retirement savings plan (PER) has been marketed since 2019 and constitutes long-term savings products intended to generate a supplementary pension.

What is a PER?

To learn more about this product, this guide gives you all the information you need to understand it.

The definition

The PER is a retirement income supplement in the form of an annuity or capital and benefits fiscal benefits. The individual retirement savings plan is a savings product for everyone, so it can be opened by anyone. The PER companies are destined to the employees of the company.

Can we have several PER?

According to the managing body, the PER corresponds to a group insurance contract (PER insurance) which is based on the structure of life insurance. It offers a savings investment in funds in euros or units of account. The amount of PER you want to open is not limited. Also, a person can have a multitude of retirement savings plans because the law does not restrict the number. So it is possible for you to have an individual PER and a company.

LOOK ALSO: How many quarters does it take to have a full pension?

What types of financial products are there?

There are exactly 3 financial products:

  • Individual PER (PERIN)
  • The collective enterprise PER (PERECO)
  • Obligatory company PER (BUT)

Here you have a mini detailed summary of these 3 products.

Individual PER (PERIN)

It does not depend on the professional situation of the people. You can be a civil servant, self-employed, salaried, self-employed or job seeker. The law does not establish an age limit, that is, a minor or a retiree can contract a retirement savings plan. Please note, however, that some contracts sometimes have certain specifics with an age limit. The latter is usually between 18 and 68 years old. The PERIN is therefore a savings account for the retirement of an individual.

The collective enterprise PER (PERECO)

It benefits all employees of the company. Sometimes, a 3-month seniority condition may be required. PERECO also includes former employees. These are companies that employ between 1 and 250 employees, whether they are managers, partners, apprentices and professionalization contracts. Please note that joining this account is optional. Although the regulations stipulate the automatic affiliation of all employees, they have the obligation to be informed of this affiliation and have 2 weeks to unsubscribe.

Obligatory company PER (BUT)

It is available to the entire workforce of a company or to an objective category of employees that is determined based on their salary bracket, for example. In this case, therefore, membership is mandatory for interested employees.

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SEE ALSO: PEA Definition: What is the Equity Savings Plan?

The 3 compartments of the Retirement Savings Plan

The retirement savings plan is divided into 3 watertight compartments where payments are made.

There is the individual compartment, the collective and finally the obligatory compartment.

If you have a PERIN, the individual compartment is the only asset and therefore receives future payments from the saver. The other two cannot enter transfers that come solely from a former retirement plan or another retirement savings plan. While for the business PER, the 3 compartments can accommodate new cash inflows.

PER financial management options

There are certain Management Terms. The retirement savings plan is based on two methods of financial management.

managed management

This is a management method applied by default that delegates the management of your savings to professionals who can distribute the investment in riskier and, therefore, more profitable media. If you retire early, less risky assets are preferred to secure the invested sums.

free management

The holder deposits his money in the funds he wishes freely.

Where to hire a PER individual ?

The subscription to the individual retirement savings plan is made with a bank, an insurance organization or a mutual. In principle, his savings are locked until he reaches retirement age. There are some special cases determined by law to have early unlock access. The death of the account holder results in its closure. Please note that the PERP is no longer in existence as of 2020.

SEE ALSO: What are the advantages of life insurance?

Should we prefer PER to life insurance for retirement?

Don’t hesitate any longer and prepare for your future with the best savings product that suits your needs!

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