Advantages of the employee saving plans
Profit-sharing, which is compulsory in companies with 50 employees or more, gives employees a stake in their company's profits. The profit share is calculated using a standard formula (defined by law) and must not exceed 75% of the Annual Social Security Ceiling. It may be placed in a Frozen Current Account, or a PEE or PERCO savings plan.
Profit-shares invested in an employee savings plan may be topped up by the company. Depending on the plan chosen, they are inaccessible for 5 years for PEEs, or until retirement for
Before the Profit-sharing is distributed, employees are asked if they wish to immediately receive or invest all or part of their profit share. The new law (of 3 November 2010) provides that employees who fail to indicate their choice will automatically have half of their profit share invested in their company's PEE/PEI and the other half in its PERCO/PERCOI, if such a plan exists within the company. If there is no PERCO, the whole of the sum will be invested in the PEE.
Incentive plans are optional and also allow employees to benefit from their company's performance, if certain profitability targets have been met. It is a form of supplementary pay calculated using a freely-determined formula based on the company's performance.
Incentive plan payments may be collected by the employee as soon as they are paid or invested in a savings plan in order to benefit from tax advantages.
Plans d’Epargne d'Entreprise (Company Savings Plans) are tax-efficient structures. They are set up to receive profit shares, incentive plan payments, employer matching contributions and voluntary payments by employees.
These sums are exempt from social security and tax charges, and from capital gains tax, except for social security contributions.
The amounts invested are locked up in the PEE for five years, except in cases of early release.
The PERCO is a solution that offers employees an extra source of income on retirement, possibly with the help of their employer and an advantageous tax framework.
They are set up to receive profit shares, incentive plan payments, employer matching contributions and voluntary payments by employees. They may also receive sums transferred from the PEE, entitlements transferred from the Comptes Epargne Temps or CET (Time Savings Account), within a limit of 10 days per year, and, failing this, sums corresponding to paid holidays not taken (maximum of 5 days per year).
You can enjoy the benefits of a PERCO if your company has set up this savings solution following the signing of a collective or company-wide agreement, or a unilateral decision by the employer. You may need to have worked for the company for a certain amount of time, but this time should be no longer than 3 months.
Only companies that have already set up a Plan Epargne Entreprise or PEE (Company Savings Plan) may decide, in accordance with a collective agreement, to offer a PERCO to their employees. Once a PERCO is in place, directors and similar employees, and their spouses working in the same company, may also benefit from it, providing that the company usually employs between 1 employee (in addition to the director) and 250 employees.
Sums invested in PERCOs are locked up until the employee's retirement, except in the cases of early release specific to PERCOs.
When you retire, you can recover your savings in the form of:
- a lump sum exempt from income tax,
- an annuity that is partially taxed according to the age at which you retire,
- both at the same time