PACT law: pension savings reform is launched

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Robert Kneschke / Shutterstock / Robert Kneschke

The reform of retirement savings is one of the priority areas of the PACTE law. The government wants to unify the existing systems, simplify their operation and increase their attractiveness in terms of taxation. Its goal is twofold: to encourage savings while orienting it towards businesses. Here are the contours of the coming reform.

Creation of the Retirement Savings Plan (PER) to facilitate portability

At present, many retirement savings schemes coexist. There is the Retirement Savings Plan (PERP), the Savings Plan for Collective Retirement (PERCO), the Madelin Contract (reserved for self-employed workers and the liberal professions), the Retirement Savings Plan (PERE). , the Mutual Retirement Supplement (COREM) and the National Provident Fund of the Public Service (PREFON).

As part of the pension savings reform introduced in the PACTE (Action Plan for Growth and Business Transformation), a new envelope will be created: the Retirement Savings Plan (PER). It will consolidate the mechanisms mentioned above and will therefore facilitate the portability of retirement savings. Thus, the PER will follow its holder throughout his career.

To note

Within the PER, accumulated savings can be transferred from one device to another. The transaction will be free for amounts placed for more than five years.

Early release for the purchase of the principal residence

For all retirement savings schemes, the reform will make possible the early release of funds in case of purchase of a principal residence. An amendment wanted to limit this release to the first acquisition. However, this stricter framework was not retained.

Capital outflow becomes possible

The annuity exit, today most often mandatory, will no longer be a brake on the development of retirement savings. His alternative, namely capital outflow, will be generalized. Specifically, any saver may request to recover all of its capital at the time of retirement.

To know

The capital outflow will only concern funds from voluntary payments and amounts from participation. Business contributions will be excluded.

Tax deductibility of voluntary payments

To encourage the French to save for their retirement, the voluntary payments made on the future PER (and therefore on any of the devices that compose it) will be deductible from the taxable income of its holder within the limit of an annual ceiling. This mechanism is similar to the one already in place for the PERP.

Default-driven management

As this reform also aims to direct savings towards businesses, managed management will become the default option for the devices that make up the PER. Unless the holder decides otherwise, the arbitrations will be made automatically over the years according to his age. The closer it gets to retirement age, the less risky assets will be.

Uncertainty for many more months

Although the course of the reform is set, many details remain to be resolved. For example, the current text does not specify how the capital outflow will be taxed or what will be the maximum amount of tax-deductible payments. Another uncertainty: what will be the treatment of the stock of savings already placed?

In fact, the details of the reform will be communicated by order and decree, the government being responsible for defining the tax rules of the PER in a period of 12 months from the adoption of the PACT law. While the latter must not be completed before the spring of 2019, the implementation of the reform is expected for the second half of 2019.

The key points of the retirement savings reform undoubtedly strengthen its attractiveness. Nevertheless, we must wait to know the details of future decrees to measure the extent of the shift initiated under the PACT Act.