How does PER work?

No doubt you have already heard of the PER, the retirement savings plan that exists today in France. It is a savings product that was created by the PACT Act of May 2019. It is a harmonization with old products, which allows you to accumulate savings to supplement your income when you reach retirement. But how does the new retirement savings plan work and what exactly will you be entitled to? Today we tell you everything.

The system of the savings plan for retirement

The retirement savings plan is a device for retirees, available from 2019. It is also the only PER Perlib available since 2020. added to the mandatory scheme. You should know that investments that are made as part of a PER are blocked until retirement. However, there are some cases of early release and especially allow to finance the purchase of a primary residence. The retirement savings plan meets certain rules and can be funded with voluntary payments, employee savings, or even mandatory payments. Find out all on this blog.

The criteria of the new PER

The new retirement savings plan is therefore a response in line with the criticisms made of the old products. Indeed, the PER allows to contribute to the financing of the economy by creating long-term savings, available at the time of retirement. The new PER allows unlimited transfers and rates are relatively low. It is a new product that responds better to the demands of working and retired people. It is a simplified product, which actually includes all the products that existed before 2019. It should be noted that there are three families of savings plan for retirement, namely the individual PER, the company PER optional collective and compulsory collective enterprise. As for the individual PER, as its name suggests, it is intended for individuals and the self-employed. The PER can then be financed with voluntary payments, but also receive funds from other retirement products. The PER collective enterprise is a little different, as affiliation can be provided by default when you are an employee of a company. The collective PER is fed by voluntary payments by the employee, but also by transfers of sums and savings plans of the employees.

Return to PER

It’s a bit difficult to give you the rate of return in euros for a PER … Actually, the rates of return are relatively variable, and are generally between 1% and 2%. What you need to know is that the flexibility of the retirement savings plan is one of the strengths of this system. Compared to other retirement savings products that previously existed, it is possible to withdraw capital under certain conditions. In addition, as such, the departure from the capital can be done at once or perhaps divided into several years. Of course, the duration of the split is set by the institution that manages the contract and extends to a maximum of about 5 years. You should also be aware that there is generally a minimum exit amount from a retirement savings plan. However, this minimum amount rises on July 1, 2021 to € 100 per month, or € 1,200 per year: it is slightly more than other retirement savings products.

As you may have noticed, the PER represents many advantages, and in particular allows you to accumulate interesting savings to benefit you at the time of retirement. There are several precautions to keep in mind, in order to avoid unpleasant surprises. Now that you know everything, you can make an informed decision.

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