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IPE special report May 2018

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Afpen concerned over French pension reform

FRANCE – Afpen, the French pension funds association, has expressed concerns about the government’s proposals for retirement savings plans.

As part of its reform programme, the government plans to set up two products for retirement savings. One is an insurance product with tax advantages; the other is a PPSEVR, or plan parternarial d’epargne salariale volontaire pour la retraite. This is an employee savings plan for those workers and representatives of enterprises with more than 100 people.

The two new products should encourage retirement savings. Currently only employees in big firms can save with their companies via an ‘epargne salariale’ (employee medium-term savings schemes). But, as these are only five-10 year plans, they are not viewed specifically as a source of retirement provision.

Afpen has welcomed the proposed products - but says it hopes they will not be confused with the epargne salariale. The epargne retraite (retirement savings schemes) will serve as the main source of pension Afpen says. It adds that it must be made clear that it is to be offered universally as a primary source of security, serving as a pension, and aimed at individuals within a collective framework.

Afpen says the retirement schemes must remain independent from the medium-term saving schemes so that employers can offer their staff the same pension opportunities as foreign companies, and so that staff have retirement plans beyond the normal pay-as-you-go system.

As the retirement plans are offered not solely to those in large organisations, Afpen says the system is fairer and enables more people the opportunity to save, but the schemes must be offered to every worker in the future – not just those in companies with more than 100 people.

According to Afpen, the products should also have tax advantages to encourage saving. They should also allow pension tax credits to those who do not pay tax on their salaries.

The issue of retirement schemes will be included in the proposed pension reforms to be put to parliament on May 28.

Tomorrow will see national strikes in France as six of its unions take to the streets to protest about pensions reforms that will see their contribution period lengthened, and their contributions increased.

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