People's Retirement Savings Plan (Perp)
Verified 01 January 2024 - Legal and Administrative Information Directorate (Prime Minister)
The Popular Retirement Savings Plan (Perp) is a long-term savings product. It has not been marketed since 1er October 2020 due to the creation of the Retirement Savings Plan (RIP). If you have a Perp, you can keep it or transfer the money to a PER.
To transfer the money you saved on Perp to a PER, you must apply to the managing agency.
You can apply online, if it is offered by the organization, otherwise by paper mail.
Following your request, the organization managing your Perp has the obligation to open a PER for you and to transfer the savings accumulated on your Perp.
But be careful, the transfer gives rise to fees that vary from one organization to another.
You can inquire beforehand about the amount of the fee before requesting the transfer.
The money saved on the Pep is invested in life insurance.
Three types of contracts are possible:
- Contract of life annuity deferred: direct acquisition of annuity rights
- Contract in units of annuity: acquisition of points that will be converted into annuity, as for retirement
- Multi-carrier contract: the constitution of a capital which will be converted into a life annuity or paid in cash
The Perp allows you to save money during your working life and earn additional income when you retire.
You can receive either a life annuityor a life annuity and capital.
The time of retirement is when you reach the legal retirement age, or when you qualify for retirement under a mandatory plan.
Perp payments can be periodic and fixed-amount, or free and unconditional.
The Perp managing body shall comply with the following obligations:
- Keep you regularly informed of the account's progress
- Inform you annually of the amount of any charges that have been levied
- Provide you with an estimate of life annuity that he'll have to pay you
- Specify the conditions for transferring your contract to another savings product
Savings paid into the Perp are in principle blocked until retirement age. But it can be released early in some cases.
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Exceptional situations (disability, death of the Civil partnership or partner, over-indebtedness...)
It is possible to unlock your savings early, especially in the following cases:
- Disability
- Death of your spouse or Civil partnership partner
- Expiry of your unemployment benefit entitlement
- Over-indebtedness (the request must be made by the over-indebtedness commission)
- Termination of self-employed activity following a judgment on winding up by a court
- Perp savings less than €2,000
Please note
Early release for savings of less than €2,000 Perps with scheduled payments older than 4 years and those with free payments that have not had a payment for 4 years. To qualify, you must have earnings below tax scale first income tranche.
To request the early release of the Perp, you must apply to the managing body.
The request can be made online or by letter, preferably recommended, depending on the organization.
It shall contain 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
FYI
You must apply as soon as possible and no later than 2 years that follow the date on which you became aware of the exceptional early release situation.
Death of the holder
If you die, the amount of annuity you receive may be paid as a life annuity to the following persons:
- Your surviving Civil partnerships’ spouse or partner
- Or any other beneficiary that you have specifically identified in the plan
In the absence of a Civil partnership, partner and designated beneficiary, the amount will be paid as an education annuity for your minor children.
If you do not have a minor child, the Perp's savings will become part of your estate's assets.
When you reach retirement age, accumulated savings are normally paid out as a life annuity.
But you can ask for a portion of the savings to be paid out in capital. The breakdown is as follows:
- Capital at 20%
- Life annuity of 80%
Please note
if the amount of the annuity does not exceed €110 per month, the insurer may decide to pay out the entire capital savings.
Tax deduction of amounts paid
The tax advantage of Perp is to reduce the amount of your taxable income, which results in a reduction in your tax.
You can deduct from your taxable income in a year the amounts you paid on the Perp in the same year.
This deduction cannot exceed an overall limit set for each member of your tax shelter.
For payments made in 2024, this ceiling is equal to the greater of the following 2 amounts:
- 10% of 2023 professional income, net of social contributions and professional expenses, with a maximum deduction of €37,094,
- or €4,399 if this amount is higher.
Example :
You declare €30,000 taxable income and €1,200 of Perp. payments
With the deduction of Perp payments, your taxable income goes from €30,000 to €28,800.
This results in a tax cut that varies depending on the composition of your tax household.
Tax payable on annuity or capital received
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Annuity Exit
The annuity paid at the time of the release of the Perp is taxed annually on the basis of the rules applicable to life annuities, pensions and pensions.
Exit in annuity and capital
If you opt for an exit at 80% for rent and to 20% in capital, the annuity is taxed according to rules applicable to life annuities, pensions and pensions.
The capital is taxed according to progressive scale of income tax.
You can opt for a discharge of 7.5%, if the following 2 conditions are met:
- Paid-up capital in one go
- Perp supplied only with payments deductible from taxable income
Total capital outflow for contracts with an annuity of not more than € 110 per month
The capital is taxed according to progressive scale of income tax.
You can opt for a discharge of 7.5%, if the following 2 conditions are met:
- Paid-up capital in one go
- Perp supplied only with payments deductible from taxable income
People's Retirement Savings Plan
Governance of the Perp
Perp-specific technical provisions
Maximum amount of deduction from premiums paid to people's retirement savings plans
Capital outflow for small annuities
Information of the option for the capital outflow
Service-Public.fr
National Institute of Consumer Affairs (INC)
Ministry of Finance