The Ministry of Economy and Finance welcomed on Wednesday the development of the Retirement Savings Plan (PER), a funded retirement product resulting from the 2019 Pacte law, which totals 7 million customers and 80 billion euros. outstanding at the end of 2022. “The PER reform (…) is a great success: we have more than doubled our PER distribution target at the end of 2022, with more than 7 million French people equipped”, welcomed Bruno Le Maire, quoted in a press release. Bercy initially had a target of 3 million subscribers by the end of 2022.
The outstanding amount, which was to reach 50 billion euros on this date, is also higher than expected, according to the ministry. This dynamic “concerns both corporate, collective (more than 19 billion euros in outstandings) and mandatory (more than 12 billion euros in outstandings) PERs, as well as individual PERs (more than 49 billion euros in outstandings and more than 3 million holders)”, he explains.
The PER is a “tunnel” product, which is envisaged over the long term. Payments are free but will not be recoverable before retirement age, except in exceptional cases such as the purchase of a principal residence or well-defined “accidents of life”: disability, over-indebtedness, expiry of insurance rights unemployment…
At the time of retirement, two options are possible: a capital exit, a real innovation of this product compared to its ancestors PERP and Madelin contracts but highly taxed, or an exit spread over time, as an annuity. Most of the management of PERs is delegated to insurers. The younger the client, the riskier the investments: before the age of 40, the payments are invested almost entirely in units of account (UA), i.e. riskier investments but potentially more profitable in good years.
The blocking of funds over the very long term and the large share of investments more subject to the vagaries of the markets, which also generate commissions, above all make PER a godsend for insurers. Reflecting the “new expectations of the French”, according to the managing director of France insurers Franck Le Vallois, the PER also benefited from concerns around the pension system, opening a way for supporters of a dose of capitalization.
