What do you want to know?
Why take out a PEE?
The PEE is a collective product employee savings that the employer can set up for the benefit of its employees to help them build up savings under advantageous conditions.
The PEE is also accessible to him and is open to the collaborating or associated spouse.
Indeed, an employee savings plan allows the employee (s) or the company director to constitute, with the help of the company, a savings in securities in the medium term (PEE).
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In return for being unavailable for 5 years, everyone benefits from numerous advantages.
Employee savings are both interesting:
For the employee or the savings manager:
who have the possibility of building up savings with the help of the company, in order to finance a project or for retirement, by benefiting from:
tax and social benefits on the profit-sharing bonus or the profit-sharing allocated to the plan;
the leverage effect linked to the company's contribution.
For the company - In addition to the existing interest in involving employees in the development of the company, it simultaneously benefits:
a reduction in its charges linked to the exemption from social charges;
a decrease in its taxable income due to the deductibility of the contribution and the participation.
PEE
Retain your employees & tax exemption!
What is a company savings plan (PEE)?
The PEE can be funded by different types of payments: voluntary payments from the plan holder, contribution or unilateral payments from the company (incentive, participation, employer contribution, transfer from another PEE or participation, registered rights on a time savings account).
Voluntary payments can be scheduled (per month, quarter or semester) according to plan regulations.
A PEE can also be set up at the level:
Of a professional branch, between several companies taken individually or locally. This is then referred to as an inter-company savings plan (PEI). .
Within a group of companies that have established financial and economic links with each other. This is called a Group Savings Plan ( PEG ).
Please note: The PEE should not be confused with the Collective Company Retirement Savings Plan (PERECO). PERECO is an employee savings product specifically dedicated to building up retirement savings.
Opening of the contract
The Company Savings Plan can be set up in any private law company (company, sole proprietorship, farm, liberal professions, etc.).
Public industrial and commercial establishments (Epic) can also set up a PEE.
The Company Savings Plan can, under conditions, be set up by unilateral decision of the entrepreneur or negotiated as part of a collective agreement in the same way as a participation agreement.
The company savings plan is open:
To all employees without discrimination and regardless of the size of the company. Only a condition of seniority of the employee in the company of a maximum duration of 3 months can be foreseen to benefit from the plan.
Company retirees and pre-retirees under certain conditions
To company directors and their collaborating or partner spouses (married or civil partnership) as well as to corporate officers in companies with a maximum of 250 employees
To sales agents and insurance agents who have an individual contract with the company whose products or services they market
To employees of employers' groups made available to companies that are members of this group, if the PEE regulations so provide
To employees of foreign subsidiaries or branches under certain conditions
Note: If your company has set up a PEE, it must be open to all employees. However, a seniority condition may be required (3 months maximum).
If the workforce of the company does not exceed 250 employees, its manager can also benefit from the PEE, regardless of his status.
Contract support
PEEs allow their beneficiaries to build up a securities portfolio, that is to say a securities portfolio made up of investment funds in stocks, bonds, money market or diversified, or even shares directly from the company (employee shareholding).
The beneficiary of the plan must choose between several financial investment vehicles. Some are risky and can lead to capital losses because they are invested in the stock market. It is therefore important to monitor your investments in the PEE in order to make the right arbitrations, which is not always easy without the help of professionals.
The dedicated investment supports in PEE are numerous (FCPE, SICAV, SICAVAS) and more or less risky in the short or medium term.
The sums invested in the PEE capitalize inside the plan without being subject to income tax.
The company bears, in all cases, the costs of maintaining the account.
The sums paid into employee savings plans are invested in securities that must meet certain diversity and liquidity conditions.
Savings availability
The PEE can be powered by:
voluntary payments and employee profit-sharing,
participation in the company's results,
rights from the time savings account or days of rest not taken.
Each employee can pay up to 25% of his gross annual remuneration, all employee savings plans combined. The company can, within a certain limit, supplement the deposits of the saver by a contribution.
Voluntary payments can be scheduled (per month, quarter or semester) according to plan regulations.
The PEI is funded in the same way as the Company Savings Plan. To benefit from all the benefits of the PEE, the member must comply with the regulatory payment ceilings.
The PEE nevertheless has the drawback of blocking the sums invested in it for a period of 5 years.
However, there are quite a few cases of early release:
Marriage, conclusion of a PACS
Birth or adoption of a 3rd child
Divorce, separation, dissolution of a PACS, with custody of at least one child
Domestic violence
Acquisition of the main residence
Construction of the main residence
Extension of the main residence
Refurbishment of the main residence
Disability (employee, spouse or PACS partner, children)
Death (employee, spouse or PACS partner)
Termination of the employment contract (dismissal, resignation, retirement)
Business creation or takeover
Over-indebtedness
Transfers
You can transfer your savings in the following cases:
Amounts held on a PEE or a PEI towards a PEE or a PEI provided that the minimum period of unavailability of the sums is equivalent in the original plan and in the new one
Amounts held on a PEE, a PEI or a Perco to a Perco
It is not possible to transfer the sums acquired on a PERCO to a PEE.
Note: For a company, choosing to transform its article 83 contract into a PER makes it very easy to lower its social flat rate from 20% to 16%. In short, the transfer makes it possible to benefit from a substantial saving very easily.
In summary: the transfer of sums from one employee savings plan to another is possible, in the cases authorized by the regulations. The length of detention carried out in the old plan is taken into account in the new plan, with some exceptions. The sums transferred do not give entitlement to additional payment from the employer.
Taxation
The taxation of the PEE is not the same during the life of the plan and during the release.
During the life of the plan:
Taxation varies according to the nature of the sums paid into the PEE:
The contribution paid by the company is exempt from income tax for the employee, up to a limit of € 3,290.88. This limit is raised to € 5,923.58 in the event of an investment in shares or investment certificates issued by your company.
The profit-sharing paid by the company and deposited on the PEE is exempt from income tax, up to a limit of € 30,852.
Voluntary payments made on the PEE are not deductible from your taxable income.
Income from securities held in the plan
Income from securities reinvested in the plan: Interest earned on securities held in the plan is exempt from income tax when you reinvest it in the plan. They are subject to social security contributions.
Income from securities not reinvested in the plan: Interest generated by securities held in the plan is subject to income tax and social security contributions if you do not reinvest them in the plan.
Gains made in the plan: The profits generated by the sale of securities within the framework of the PEE are exempt from income tax, but subject to social security contributions.
At the end of the plan or During early release: The sums withdrawn from the plan correspond to the payments from the employer and the employee, as well as to the income generated by the plan which has been reinvested by the employee. These amounts are exempt from income tax upon withdrawal, but are subject to the social security contributions .
Exit & taxation
The Exit is made in capital.
Unavailability 5 years from the date of acquisition of the securities (SICAV or FCPE units, securities issued by the company.)
Each payment is blocked for 5 years.
Nevertheless, many cases of early exit
Taxation of the member
The profit-sharing, participation, employer contribution and portfolio income reused in the plan are exempt from income tax.
The CET assets contributed to the PEE are taxed over 4 years.
Social contributions
The incentive, participation and employer contribution are subject to CSG and CRDS
Income and capital gains from investments are subject to social security contributions.
Employer taxation
The incentive, participation and employer contribution are exempt from social contributions and deductible from the tax base.
The Company Savings Plan (PEE) allows its beneficiaries to build up a portfolio of securities within an attractive fiscal and social framework, provided they comply with the period of unavailability of sums paid, set at a minimum of 5 years. Invested savings capitalize without tax on capital gains. The company savings plan, on the other hand, supports social security contributions on exit.
The company savings plan includes the following sources of funding:
Voluntary payments (including profit-sharing, monetized rights from a CET, if the agreement provides for it),
The participation.
Transfers from other employee savings plans,
Additional payments from the employer (top-up),
The contribution is financial assistance paid by the employer in addition to the payments made by employees into the employee savings plans and the PER. It is specific to the Company Savings Plan (PEE), the Collective Retirement Savings Plan (PERCO) and the Retirement Savings Plan (collective compartment, PERECO or PERCOL). Its objective is to encourage savings within a company within a favorable tax framework. For the company, the contribution is exempt from employer social charges. This is a deductible charge that reduces taxable profit.
The company can match all or part of the payments of its employees (profit-sharing, profit-sharing, voluntary payments) up to 300% within the limit of the legal ceiling applicable each year:
Maximum 8% of the Annual Social Security Ceiling (PASS) for the PEE PEI
Maximum 16% of the PASS for PERCO and company PER (collective compartment, PERCOL)
The company savings plan (PEE) and the collective retirement savings plan (PERCO) are collective savings systems that allow employees to build up savings.
Employee payments on these plans can be supplemented by company contributions in the form of top-ups. For the company, it is a tool for building employee loyalty.
The sums paid are unavailable for at least 5 years for the PEE and until retirement for the PERCO, except in the case of exceptional releases.
the PEE makes it possible to constitute a portfolio of transferable securities. The sums are unavailable for at least 5 years, except in the case of exceptional releases.
The PEE is more flexible and is oriented towards medium-term projects: it is a savings tool whose immobilization is shorter and the exit conditions without penalties, numbering 9, when the PERCO has 5.
* An inter-company savings plan (PEI) is a PEE that is managed by several companies.
An IEP is set up when the company is not, or no longer has, a sufficient size to cover the management costs on its own. Switching to a PEI allows these costs to be pooled.
the PERCO is used to save for retirement. The sums paid are therefore blocked until this deadline, except in exceptional cases of unblocking. At the time of retirement or early retirement, the nest egg is available in the form of an annuity or, if the collective agreement so provides, in the form of capital.
PERCO prepares for retirement and offers long-term investments designed to gradually reduce financial risk as retirement age approaches.
* The PERCO-I is an Inter-company PERCO. Easier to set up, it consists of joining a PERCO common to several companies and therefore does not require the completion of the necessary steps to set up a PERCO.
Focus on Payments & Tax / Social Benefits
Advantages & disadvantages Employee savings plan
Retirement Savings Plan
Example of use of the PEE for the employer
1
Initial situation
Bryan is a dentist. He is 50 years old.
His wife is an employee of the firm.
He makes a profit of € 150,000 and his marginal tax rate is 41%.
Annuity phase
Outcome
2
Details
Annual tax savings on BICs: € 6,000 x 41% or € 2,460
Overall tax savings over 15 years: € 36,900Savings on social contributions:
social contribution rate at the margin estimated at 28.8%,
i.e. a gain of € 6,000 x 28.8% = € 1,728but these social contributions would have been deductible from the result for 25.9%, or € 1,554
Or a net gain of € 1,728 - (1,554 x 41%) = € 1,091
Or a total gain over 15 years of € 16,365
Real cash savings effort: (€ 60,000 x 2) - € 36,900 - € 16,365 = € 66,735
(*) Annual contribution of € 3,000 less the CSG and CRDS (around € 240), ie a net amount of € 2,160.
At the conclusion, the spouses will have together a total capital of:
€ 65,525 x 2, i.e. € 131,050, for a real savings effort of € 66,735.
Example of use
PEE for employees
1
Initial situation
Catherine hesitates:
between paying a bonus to each of its employees
or make a payment on their PEE (contribution) for an amount of € 2,000.
2
How the PEE works:
3
Final situation
After comparison, it emerges an efficiency rate (ratio between the net savings of the saver versus the overall cost for the company) of 90% for the matching against 31% for the premium.
