Retirement Savings Plan (RIP) - INDIVIDUAL PER 

Verified 01 janvier 2024 - Legal and Administrative Information Directorate (Prime Minister), Ministry of Finance

Your situation

  • This is an individual PER 
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The individual PER is open to all. You can purchase it from a financial institution or an insurance organization. This new plan succeeds the PERP and the Madelin contract, which have not been offered since 1er October 2020. Your savings accumulated on the Perp and Madelin can be transferred to the individual PER at your request. This contract entitles you to tax benefits and your rights are transferable to other PERs. There are cases of early release.

The individual ERP is a long-term savings product.

It allows you to save during your working life to get, from retirement age, a capital or a rent.

The plan gives rise to the opening of a securities account or to the adherence to a group insurance contract.

The individual PER is open to all. There are no conditions related to the employment situation (jobseeker, employee, self-employed) or age.

It will no longer be possible to open an individual PER for a minor child after the marketing of Climate Future Savings Plan, scheduled for first quarter 2024.

This new long-term savings product is reserved for children and young people under the age of 21.

The funds invested in this plan will be used to finance projects in the area of health ecological transition.

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Individual investment RIP

The RIP leading to the opening of a securities account must be purchased through a specialized business. It is a business that is an authorized provider to carry out the activity of investment advice (credit institution, investment company, financial investment advisor).

Individual insurance per

The individual ERP giving rise to membership in a group insurance contract must be purchased through a specialized business. It is an association that underwrites group life insurance contracts (insurance companies, mutual societies and provident societies).

The individual PER may also be opened with a supplementary occupational pension fund.

FYI  

the contract may be marketed by an intermediary on behalf of a group insurance association or an additional occupational pension fund (bank or financial advisor).

Unless otherwise stated by you, the management of the amounts paid out of the RIP follows the principle of managed management. This means that when retirement is distant, savings can be invested in riskier, more remunerative assets. As we approach retirement age, savings are increasingly being channeled into less risky assets.

The managing body must provide you with information on the characteristics of the plan, its management method and its taxation when the RIP is opened.

Then, every year, he must give you the following information:

  • Account Evolution
  • Financial performance of investments
  • Amount of charges levied
  • Plan Transfer Conditions

From 5è In the year preceding the year of your retirement, you can ask the ERP manager about the exit options that are appropriate for your situation.

The individual ERP is initially funded by the voluntary payments you make.

In addition, if you transfer a company PER to an individual PER, you can also pay:

FYI  

there is no cap on voluntary cash payments on the individual PER, but there is a cap on the amount for which you can receive a tax benefit.

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General case

When you have reached retirement age and have not previously opted for the life annuity, you can request that the savings accumulated in your individual RIP be paid:

  • or capital,
  • or in annuity,
  • or partly in capital and annuity.

The same applies to salary savings (profit-sharing, participation, abundances, TEC days) which may be transferred to your individual RIP.

FYI  

the capital may be paid in installments.

Before retirement age

You can recover your capital savings early if you:

  • Disability (you, your children, your spouse or Civil partnership partner)
  • Death of your spouse or Civil partnership partner
  • Expiry of your unemployment benefit entitlement
  • Over-indebtedness (in this case, the over-indebtedness commission must make the request)
  • Termination of self-employed activity following a judgment on winding up by a court
  • Acquisition of the principal residence (except for rights arising from compulsory payments).

To request the early release of the RIP, you should send a letter, preferably recommended, to the managing body, with the following elements:

  • Proof of identity
  • Bank identity statement of the account to which you wish to obtain payment
  • Justification for the exceptional early release situation you invoke

The method of taxation of the capital resulting from the early release depends on the reason for the release.

If the release is based on another reason than the purchase of the principal residence, the part of the capital released corresponding to the payments shall be exempt from income tax and social security contributions.

The part of the capital released corresponding to the gains is subject to social security contributions.

If the release is motivated by the purchase of the principal residenceHowever, the situation varies depending on whether you have deducted the payments made from the RIP for tax purposes.

If you deducted the payments for tax purposes, the part of the capital released corresponding to the payments shall be taxed on income tax without a 10%, but exempt from social security contributions.

The share of the released capital corresponding to the gains shall be taxed at the flat-rate levy (PFU) of 30%.

If you have not deducted the payments for tax purposes, the part of the capital released corresponding to the payments is exempt from income tax and social security contributions.

The share of the released capital corresponding to the gains shall be taxed at the flat-rate levy (PFU) of 30%.

If you die, the plan will be closed.

The money saved must be repaid to your heirs or to the beneficiaries which you have designated in the contract, in the form of capital or rent.

If the plan is in the form of a securities account, the savings are included in the estate.

If this is a plan that has resulted in a group insurance contract being purchased, the savings must be repaid to your designated beneficiaries in the contract, as per the life insurance rules. The situation varies depending on whether the death occurred before or after age 70.

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Death before age 70

A reduction of €152,500 shall be applied to the sums paid on the contract.

The balance is subject to a levy of 20% per share of each heir less than or equal to €700,000.

The taxable share of each heir greater than €700,000 shall be subject to the taking of 31.25%.

Death after age 70

The share of the capital of the contract (savings and gains) in the insurance contract that exceeds €30,500 shall be subject to inheritance tax.

Tax advantage on voluntary payments

Amounts paid out of an individual RIP in a year shall be deductible from that year's taxable income up to an overall limit set for each member of the tax shelter.

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You're a salaried employee

The maximum deduction limit for pension contributions is 10% wages and salaries reported on your 2023 tax return.

The amount of the ceiling is at least of €4,399 and maximum of €35,194.

The amount of the ceiling is reduced the following:

  • Contributions to supplementary pension schemes made compulsory in the company for employees (employers’ share for its tax-free amount and employees’ share for its amount deductible from salary)
  • Employer’s contribution to the Collective Retirement Savings Plan (Perco), the Collective Retirement Savings Plan (Perco) or the Compulsory Retirement Savings Plan (Pero) up to the company’s income tax-exempt amount
  • Entitlements recorded on the CET (Time Savings Account) or, in the absence of the CET, monetized, exempt leave days (up to 10 days) allocated by the employee to a Perco, Supplementary company Pension Plan or Pereco.

The ceiling is increased the unused deduction limit (or part of the limit) in the previous 3 years, from oldest to newest.

Example :

You didn't use up your entire deduction limit in 2022 and 2023.

Your 2024 contributions are deducted as a priority from your 2024 limit.

The amount that exceeds your 2024 cap is deducted from the remaining portion of your 2022 cap, and then from the remaining portion of your 2023 cap.

If you do not deduct these payments from your taxable income, you will have a tax benefit when you exit the individual ERP.

You're independent

The ceiling is equal to 10% professional income (BIC: titleContent, NBC: titleContent, BA: titleContent) reported on the 2023 tax return.

The ceiling amount is at minimum of €4,399 and the maximum of €35,194.

The amount of the ceiling is reduced contributions voluntary schemes for self-employed persons and managers, for the amount deductible from profit or loss, without taking into account their proportion corresponding to 15% the share of taxable profit between one and eight times the annual amount of the social security ceiling.

The ceiling is increased the unused deduction limit (or part of the limit) in the previous 3 years, from oldest to newest.

Example :

You didn't use up your entire deduction limit in 2022 and 2023.

Your 2024 contributions are deducted as a priority from your 2024 limit.

The amount that exceeds your 2024 cap is deducted from the remaining portion of your 2022 cap, and then from the remaining portion of your 2023 cap.

You are unemployed or retired without work income

The ceiling is €4,399.

The ceiling is increased the unused deduction limit (or part of the limit) in the previous 3 years.

For example, if you did not use your full deduction limit in 2023, you can use the remaining portion to increase your deduction limit in 2024.

FYI  

the tax advantage associated with the transfer of a life insurance contract of more than 8 years to an RIP (doubling of the deductions related to detention) ceased on December 31, 2022, as the transfer was no longer possible.

Taxation of annuity or capital

The tax treatment of annuities or capital differs depending on whether or not you deducted voluntary payments from your taxable income.

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You deducted the POR payments from your taxable income

Annuity Exit

The annuity paid at the time of the release of the RIP is taxable at income taxunder the pension scheme.

A reduction of 10% is deducted from the amount of the annuity. The balance is added to all your taxable income before the progressive income tax schedule.

Of social security contributions shall also apply to the share of the annuity corresponding to voluntary payments.

The share of the annuity corresponding to voluntary payments is taxable to social security contributions after deduction of an allowance fixed according to your age:

  • 30% if you are under 50 years old
  • 50% if you are between 50 and 59 years old
  • 60% if you are between 60 and 69 years old
  • 70% if you are over 69 years of age

The rate of social security contributions is 17.2%.

Capital outflow

The share of capital corresponding to voluntary payments shall be taxed on the progressive scale of income taxBut not on social security.

The share of capital corresponding to the products generated by the contract shall be subject to a flat-rate levy of 30%, corresponding to 12.8% for income tax and 17.2% for social security contributions.

The bank shall make the withdrawal of 30% before paying you the principal.

You can apply to be exempt from the lump sum levy if your reference tax income for the penultimate year is less than €25,000 (€50,000 for a couple).

For revenues received in 2023, this is the 2021 benchmark tax revenue.

The application is to be sent to the financial institution that pays you the income no later than November 30 of the year preceding that of the payment (November 30, 2023 for an exemption in 2024).

In general, the institution will send you an honorary attestation form to return to the institution if you meet the conditions.

You have not deducted the POR payments from your taxable income

Annuity Exit

The annuity is taxable at theincome tax, according to the applicable rules life annuities for consideration. It's a tax system that takes your age into account.

Thus, the part of the annuity taxable for income tax purposes is the amount of the annuity reduced by a reduction of:

  • 30% if you are under 50 years old
  • 50% if you are between 50 and 59 years old
  • 60% if you are between 60 and 69 years old
  • 70% if you are over 69 years of age

Of social security contributions shall also apply to the part of the annuity corresponding to the earnings generated by voluntary payments. The rate of social security contributions is 17.2%.

Capital outflow

The share of capital corresponding to your voluntary payments not deducted from tax is exempt from income tax and social security taxes.

The share of capital corresponding to the interest generated by the contract shall be subject to a lump-sum deduction of 30%. This levy corresponds to income tax of 12.8% and social security contributions up to 17.2%.

You can apply to be exempt from the lump sum levy if your reference tax income for the penultimate year is less than €25,000 (€50,000 for a couple).

For revenues received in 2023, this is the 2021 benchmark tax revenue.

The application is to be sent to the financial institution that pays you the income no later than November 30 of the year preceding that of the payment (November 30, 2023 for an exemption in 2024).

In general, the institution will send you an honorary attestation form to return to the institution if you meet the conditions.

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Transfer of old savings products to the individual RIP

You can transfer retirement savings products that existed before 1er October 2019 on the individual RIP:

  • Popular Retirement Savings Plan - Perp
  • Madelin Contract
  • Prefon
  • Group Retirement Savings Plan - Perco
  • Mutual pension supplement - Corem
  • Hospital Retirement Supplement - CRH
  • Article 83 contract

If you have held the product under 10 years, the transfer fee can be charged up to 5% of the accumulated savings.

The transfer must take place within a maximum of 4 months.

In case of delay, you can refer the matter to the Ombudsman of the Autorité des Marchés Financiers.

Who shall I contact

  • Ombudsman of the Autorité des marchés financiers (AMF)

    If you encounter a difficulty with a financial intermediary or a listed business, you can refer the matter to the AMF Ombudsman.

    Caution : before submitting your complaint, make sure that your request falls within the AMF's jurisdiction.

    By E-mail

    Access to contact form

    By mail

    Ombudsman of the Autorité des marchés financiers

    17 place de la Bourse

    75082 PARIS CEDEX 02

    By telephone

    01 53 45 60 00

FYI  

the tax advantage linked to the transfer of an insurance contract of more than 8 years to an RIP (doubling of the deductions related to detention) ceased on December 31, 2022.

Transfer of the individual PER to another PER

You can transfer the accumulated savings on the individual PER to all other PERs.

The transfer is free if you have held the product for at least 5 years.

If you have held the product for less than 5 years, the transfer fee can be charged, up to 1% of the accumulated savings.

The transfer must take place within a maximum period of 3 months.

In case of delay, you can refer the matter to the Ombudsman of the Autorité des Marchés Financiers.

Who shall I contact

  • Ombudsman of the Autorité des marchés financiers (AMF)

    If you encounter a difficulty with a financial intermediary or a listed business, you can refer the matter to the AMF Ombudsman.

    Caution : before submitting your complaint, make sure that your request falls within the AMF's jurisdiction.

    By E-mail

    Access to contact form

    By mail

    Ombudsman of the Autorité des marchés financiers

    17 place de la Bourse

    75082 PARIS CEDEX 02

    By telephone

    01 53 45 60 00

End of the opening of the RIP to minor children

Published on 24 October 2023

A new one long-term savings product will be available on the market during the 1er quarter 2024. This is the climate savings plan, which targets the public of children and young people under the age of 21.

Funds invested in this plan will be directed to projects related to the ecological transition.

The new plan will replace the individual PER for minor children at the time of its commercialization.

The device is provided for in green industry act of 23 october 2023.