Savings, how to best take advantage of them?

of company saving plans (PEE) have many advantages and could become more democratic as early as 2019.

With 11 billion euros of payments in the first half of 2018, bringing its assets to more than 135 billion euros, the success of the salary savings does not disappoint. More than 11 million savers today have an investment of employee savings, according to data released in October by the Association française de la gestion financière (AFG), whether in the context of company savings plans (PEE, 118,5 billion euros of assets), or employee savings plans, retirement (Perco 16.9 billion of assets).

The PEE and the Perco provide access to investments that are very different. On the 135,4 billion euros of savings identified by the AFG, there is thus a 38% employee share ownership (the employees subscribe to the shares of their own company), but also 12% of the other investment funds in shares listed on the stock Exchange, 13% of funds in bonds, 15% cash currency and 22% of diversified funds with a mix of the previous categories.

a Lot of advantages, a few limitations

One of the main assets of the savings schemes is their taxation. "It is a device ultra-advantageous to place the share of the profit of the company, that is to say, the incentive and the participation in the profits, as well as voluntary payments, with a matching contribution from the employer," explains Jérôme Dedeyan, founder of Eres, a management company specialist salary savings. When a company pays to its employees for incentive awards or a share of profits, the latter are exempt from income tax if they are placed in a PEE or a Perco. In addition, some companies provide a matching contribution of the employer, that is to say, a boost to encourage employees to save, up to three times their payment, within a maximum of 3 178 € for a PEE and 6 357 € on a Perco in 2018.

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For the employee, there is a drawback to these benefits. The money placed on a PEE is normally blocked for five years, after which earnings will not suffer that to 17.2% in social security taxes. We can, however, recover his money in nine cases of early release, especially when you leave the company, but also to buy her home or work, in cases of marriage, divorce, etc

For the Perco, the conditions are a little more restrictive. The money is normally blocked until retirement, but with five cases of early release, especially for the purchase of his principal residence, or if one is at the end of the rights of indemnification of unemployment.

outside of these restrictions, the main default of the savings so far was its exclusivity. In addition to employees of the largest companies, the others had little access. Nearly 90% of groups of more than 1 000 people have a PEE, but they are hardly more than 40% in SMES with 50 to 100 employees, around 15% in those 10 to 50 people, and 10% in TPES from less than 10 employees, of which only 4% have a Perco. In total, 7.1% of the French have savings in a PEE, but they would be three times more numerous among the managers (22.8 per cent), according to the latest survey of Kantar TNS realized for the financial markets Authority last march.

The employee savings plan more accessible in 2019

With the law funding Social Security for 2019, already passed, and the law Covenant, which will be discussed in the Senate in early February, several provisions to promote access to the PEE and Perco in smaller firms, as early as 2019. "The new provisions give a huge boost to the employee savings in SMES", says Jérôme Dedeyan.

First pane, the "forfait social" has been removed, as from 1 January 2019 for all the savings in all companies with less than 50 employees, and divided by two on the incentive in the larger SMES.

Until now, when the employer of a company with 1 to 49 employees shed money on a PEE or a Perco to their employees (in the form of profit sharing, participation or contributions to voluntary payments), he was paying 8 %, 16 % or 20 % of employer contributions, or "forfait social". This will not be the case. In most large companies corresponding to the eu definition of SMES (50 to 250 employees and less than € 50 million annual turnover or less than 43 million balance sheet total), the social contribution has also been removed on the amounts paid in incentive, including the individual limit would be raised to nearly 30 000 € 20 000 at present.

The social contribution is also increased from 20% to 10% on the company contribution to an employee savings plan in the employee shareholding, that is to say, the sums given by employers to their employees to help them buy shares of their company, regardless of its size.

About 1.2 million companies with fewer than 50 employees, a million has no device savings. These treats tax could convince many bosses of these SMES and VSES to open a PEE or a Perco to their employees as for themselves.

let's Take an example. Today, a salary of 1 000 € gross costs 1425 € to the employer and procure a net income of 762 € to the employee, before income tax. With the removal of the social contribution paid by the employer, if he pays 1 425 € in profit-sharing or a matching contribution on an employee savings plan, the employee is seen taking 9.7% of social contributions and cash 1 287 € salary savings placed, tax-exempt income. Many employees are sensitive to this type of benefits, even if they have to admit that the evaporation of the contributions is also weakening their social protection systems and pension schemes.

A family of funds, the larger the savings

Second pane, the law Covenant extends to the PEE to the possibility of additional unilateral employer without any payment of employees. This faculty, which exists for the Perco since the law Macron August 2015, would allow employers to contribute up to 6% of the annual ceiling of social Security on the PEE of their employees even if they pay nothing themselves.

The law also provides expanding ranges of funds offered under the savings, by adding funds that have been awarded the energy Transition and ecological climate (TFFC)", along with funds for socially responsible investment (SRI) and solidarity already have provided in all the PEE.

Finally, the law Covenant plans to strengthen the assistance to the decision of the investors. Today, many employees have no board to make their choice among the various types of mutual fund business (CIPF) proposed in their PEE. In the future, they will need to provide tools to aid in the orientation of the savings, for example, questionnaires that define a management profile in order to propose a distribution of savings, or a mandate from management-controlled.

By default, many investors sought refuge on the cash funds, deemed to be risk-free. If they are immune to the storms of stock market, these funds once profitable are now structurally losers. Since the european central Bank (ECB) has set a negative interest rate, the FCPE in cash lost every year between 0.3% and 0.5%.

The FCPE actions have a profile of risk/profitability higher, that is to say, they benefit more from rising financial markets but they are more exposed to losses when they fall. On average, the CIPF european shares have lost 7.3% over a year, but still up 9.4% over three years, to October 16, according to the database Quantalys, while the CIPF in international shares are stable over one year and up 15.6% over three years, on the same date.

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The employee savings plan is invested approximately 60% in equities, 38% via funds, employee stock ownership, 12% via equity funds and the balance through mixed funds, according to the French Association of financial management.

AFG