French company plans reach Senate
Legislation on France’s ‘épargne salariale’ – savings plans for company employees has passed to the senate after successfully clearing the country’s Assemblée Nationale, albeit after amendment.
And one of the changes brought in – universalisation of the system for all employees - could potentially generate extra asset flows of F30bn (e4.6bn) into investment funds in France.
Eric Franc, head of retail management and épargne salariale with AXA Investment Managers in Paris, comments: “The project is to give access to give everybody and we are talking about an additional eight million people.
“The market at present represents around e15bn and covers around four million people, so we can imagine that five years from now the market will triple. “This is a very good improvement”
The original concept of épargne salarial’ was a five year plan (Plan d’Epargne à Terme d’Entreprise) with investment in a company fund or independent mutual fund.
Investment in the company of work benefitted from a 20% discount on the price of the stock. Contributions are paid into the country’s old age solidarity fund - the FSV (Fonds Solidarité de Vieillesse – so will profit the regimes de base,
Says Franc: “Now these plans could be for everyone in a company so you could imagine other plans being introduced as part of this, perhaps with a 10 year horizon period.
“We don’t have all the information, but we could even imagine longer term vehicles than this.
“It’s like the 401k market – you can have a fund that is invested 100% in your own company stocks, but you can also invest in any kind of mutual fund you like.
“Until one year ago most people had two funds, one in the company and one in French equities, but now the evolution is to move towards six or seven funds.”