France

Why the new retirement savings plans are appealing – Economy



PER have already conquered 1.4 million policyholders. “A very positive result,” said Franck Le Vallois, Managing Director of the French Insurance Federation. “We have outstanding amounts of 18 billion euros” at the end of March.

If this amount remains modest compared to other investments more expensive and popular with the French such as life insurance (1,800 billion euros in outstanding) or the Livret A (463 billion), the young PER is however taking the first steps noticed.

Between October 2019 and March 2021, the net amount garnered by this investment reached around 4 billion euros, where life insurance saw the departure of just over one billion euros, according to figures transmitted. by the French Insurance Federation. For Mr. Le Vallois, “it is a product that quickly found its place on the market. When we compare the growth curves, that of the PER can sometimes be up to three times higher “than those of other products with the same objective, such as the old popular retirement savings plans (PERP), which have been closed for sale since the end of 2020. .

In the face of life insurance

Created via the Pacte law and distributed since October 1, 2019, the PER should make it possible to revive retirement savings in France, a long-term investment that can be used to finance companies but neglected in recent decades, in particular for the benefit of life insurance . The latter has long been a Swiss army knife in France. It “did everything, allowing both security and performance, but in the current period of low interest rates, this equation no longer works,” says Jean-François Garin, CEO of Groupama Gan Vie. “Savers need to ask themselves more about what they want to do with their savings”.

Retirement savings make it possible to accumulate a nest egg which will be distributed at the end of working life and will supplement the pay-as-you-go retirement system. The sector has long been fragmented into multiple products (Madelin, Perp, Perco, article 83, etc.) with heterogeneous and complex rules. In the summer of 2019, only 230 billion euros were invested in retirement savings, roughly seven times less than in life insurance.

Objective 300 billion

Called upon to replace other contracts and correct any shortcomings, the PER is available in three forms: individual PER, collective company PER and compulsory company PER. It can be taken out either individually with a banker, insurer or broker, or by the company on behalf of its employees. The government hopes, thanks to it to bring the outstanding retirement savings to 300 billion euros by 2022. “We are very satisfied, the product is developing very well and is meeting fairly general satisfaction, whether from customers, distribution networks, companies, ”says a source in Bercy.

Annuity or capital outflow

Where previous products generally only offered the payment of an annuity at the time of retirement, PER allow a free choice between annuity, withdrawal of accumulated capital or a mixture of the two. The sums paid are deductible from income tax. “The abolition of the compulsory retirement pension was a real big breakthrough, which attracts people,” explains Gilles Belloir, general manager of the online broker Placement-direct.fr. This provision “makes it possible to modulate more with other investments”.

The PER is also favored by insurance companies because the funds are blocked – with a few exceptions – until retirement, which “leaves a lot of time for the insurer to find an equation and a long-term performance” , insists Mr. Garin. But all contracts are not equal: “Many players have a heavy hand on payment costs, which sometimes eat up almost any profitability,” warns Lionel Maugain, of the magazine 60 million consumers. These costs, “of 2.5% on average, can reach up to 5%. They are unjustifiable from our point of view, ”adds Mr. Maugain, calling on savers to compete.

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