PER has attracted many investors since its launch in late 2019. This pension plan is a hit with investors. Its flexibility, in particular the ability to withdraw funds in the form of capital, is one of the advantages, according to a survey of depositors.
PER already conquered 1.9 million policyholders. “Very positive assessment,” said Franck Le Vallois, director general of the French Insurance Federation. Investments in the new pension plan amounted to €21 billion by July 2021.
While this amount remains modest compared to other more popular investments in France, such as life insurance (€1.800 billion) or Livret A (€463 billion), the young PER is nevertheless taking its first noticeable steps.
According to Monsieur Le Vallois, “This is a product that has quickly found its place on the market. If we compare the change curves, the PER can sometimes be three times higher" than other products in the world. Old pension savings plans (PERP) have been closed for subscription since the end of 2020.
The goal is 300 billion
The PER, created in accordance with Loi PACTE and distributed from 1 October 2019, is intended to increase pension savings in France, long-term investments that can be used for the funded part of the pension. They have been neglected in recent decades in favor of Assurance Vie in particular.
Pension savings allow you to accumulate capital, which will supplement your pay-as-you-go pension after retirement.
The sector has long been divided into several products (Madelin, Perp, Perco, article 83, etc.) with complex rules.
In the summer of 2019, only 230 billion euros were invested in pension savings, which is about seven times less than in Assurance Vie products.
Intended to replace other contracts and correct any shortcomings, PER is available in three forms: individual PER, collective PER and mandatory corporate PER. It can be issued either individually with a bank, insurance company, broker, or by a company on behalf of its employees.
The government hopes to increase pension savings to 300 billion euros by 2022.
“We are very pleased, the product is developing very well and is receiving good feedback from customers, distributors and companies,” said a source in Bercy.
The abandonment of the mandatory withdrawal of pensions in the form of annuity was a big breakthrough
Whereas previous products typically offered only an annuity payment at retirement, PER allows for a free choice between an annuity, a capital withdrawal, or a combination of both. Contribution amounts are deducted from income taxes.
The abolition of compulsory annuity has become a real big breakthrough that attracts people. This makes it possible to build a pension using other investment products.
Insurance companies also support PER because depositors' funds are placed over a long-term horizon, allowing the insurer to invest in higher-yielding instruments with lower risks.
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