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People's Retirement Savings Plan (Perp)

Verified 01 August 2023 - Legal and Administrative Information Directorate (Prime Minister)

The Popular Retirement Savings Plan (Perp) is a long-term saving. It allows you to save during your working life and to have a life annuity and on option a capital. New Retirement Savings Plans (RSPs) have been available since 1er October 2019. If you already have a Perp, you can transfer your savings to an individual PER or to the PER set up in your company. The Perp has not been offered since the 1ster October 2020.

The Popular Retirement Savings Plan (Perp) is a long-term savings product. It allows you to save for your working life and to 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.

Since 1er October 2019, you can transfer your Perp savings to a PER: titleContent.

The Perp has not been offered since the 1ster October 2020.

There is no specific age requirement, even if the product is specifically aimed at people in active employment. There is no requirement to be in operation either. The cost is €15.

Opening a Perp is like taking out a life insurance contract. 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

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 recover your savings early 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 the tax credit threshold of the housing tax.

To request the early release of the Perp, 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

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.

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 2023, this ceiling is equal to the greater of the following 2 amounts:

  • 10% of 2022 professional income, net of social contributions and professional expenses, with a maximum deduction of €35,194,
  • or €4,114 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 the 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