In the chapter "More Innovative Companies" in the section "Improving and Diversifying Financing", the very ambitious PACTE bill presented on last June 19 before the National Assembly makes official the launch of the retirement-savings reform.
1. Schedule
It may seem strange to first take care of the last tier of the French retirement system (retirement-savings) when:
- discussions have just been initiated on the foundations of this same system (with the creation of a universal primary retirement system) the implementation of which is not planned for several years.
- the merger of the Arrco Agirc retirement schemes (the system's intermediate tier) enters into force on next January 1.
But, looking at it closely, the schedules are not that far apart and each reform, given its content, may go forward without completely needing the other reform.
For the primary retirement reform, after the concertation phases, the bill should be presented in Parliament in 2019 for adoption (and, therefore, transparency of the system) likely in 2020.The measures taken will progressively enter into force over several years, beginning in 2025.
For the PACTE bill, parliamentary debates will begin next September and, in an optimistic scenario, could be completed before the end of 2018.Some measures related to the retirement-savings system are announced by this bill as having to be part of the finance and social security financing acts (in principle those passed in December 2018).In addition, the PACTE bill refers, for a certain number of subjects impacted by this reform, to decrees and, above all, to orders to appear within 6 to 12 months after the act's publication.Lastly, it is expressly provided that the principal measures of the PACTE act involving retirement-savings will enter into force no later than January 1, 2020.
2. Initial observation
Starting with the observation that in France the retirement-savings system is fragmented and compartmentalized, Article 20 of the bill provides a very strong symbolic act:the creation in a single code (here the French Monetary and Financial Code) of a chapter dedicated to "retirement-savings plans" and applicable to all individuals regardless of their status.
The PACTE bill, therefore, goes much further than the very general, disconnected definition of any other text than the act of November 9, 2010, had set forth in its Article 107 pertaining to the retirement-savings system.
It creates a veritable legal foundation shared by all retirement-savings plans and carries out a full revamping of the architecture of offerings for retirement on the French market.
Today, the retirement-savings system is complex and struggles to find its place between employees' savings plans and life insurance.
It designates a variety encompassing companies' collective and mandatory contracts (referred to as "Article 83"), the PERPs, the Madelin and agricultural Madelin contracts (for freelance workers), the PERCOs and also the PREFON, CRH and COREM contracts.
They have diverse and distinctive characteristics:
- The affected public (employees, non-employees, civil servants, individuals "without a category"),
- The tax and social environment,
- The benefits (capital or pension),
- The savings' financial management,
- The cases of early disbursement (for example, in case of the death of the insured party's spouse/civil union partner; in case of disability; in case of the end of unemployment or 2 years after revocation of a corporate office; in case of over-indebtedness; and, for employees, in case of court-ordered liquidation),
- The actors carrying and managing these products:insurer organizations (insurance companies, provident fund institutions, supplementary health insurance), assets management companies, supplementary retirement pension funds (FRPSs).
Their heterogeneity is such that it has never allowed—despite European incentives—true portability of an individual's vested rights in one system to another, throughout his career path—although the stated purpose of all these offerings is to create supplemental income during retirement.
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