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Impact Investing

IPE special report May 2018

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Small Paris companies get second pillar boost

FRANCE – Small and medium sized firms in Paris got a pension boost today with the launch of the plan d'epargne salariale interentreprises de Paris (PESI).

This is an employee savings scheme of the kind already found in France but with the specific aim of encouraging employee savings at small and medium sized companies in Paris.

The problem is that membership of employee savings schemes among companies of fewer than 50 employees currently stands at just 10%, compared with 95% at companies of 500 employees or more.

The signatories of the agreement are Pierre-Louis Rochambleu, delegate general of MEDEF in Paris, Bernard Lachaux of the Paris branch of the CFE-CGC and Jean-Luc Rageul, secretary general of the Paris CFDT.

"The main challenge this year is to spread the word about this new product", Jean-Luc Rageul said in an interview with IPE on the sidelines of a news conference. "Bosses and their employees don't necessarily know the aims of employee savings."

He added: "While there are national agreements concerning employee savings they are not applied at a local level. Local agreements are playing an increasing role in the growth of employee savings in France."

"The problem is that bosses and employees of medium and small companies are not unionised, so they do not benefit from agreements reached on a national level between the unions and employers' and employees' organisations. Today the divide is not between private and public organisations but between large and small."

There are 120,000 companies in Paris with at least one employee, which together account for 1.2m bosses and workers. "It's an enormous task," said Jacques Lapoutte, director of the SME market at consulting firm Fongepar.

"The directors of small and medium sized companies have many things to do and it will be difficult to get an hour of their time to explain the benefits of this new scheme.”

PESI consists of a five-year savings plan and a longer-term retirement plan which offers the option of drawing down cash before retirement.

Meanwhile, state-controlled France Télécom has announced that 6,500 of its workers in France will be entering pre-retirement or retirement.

The move comes as the group pursues its plans to reduce debt, and enhance its competitiveness.

The branch of trade union CGT representing post and telecommunication employees has opposed the plans and in a statement called them a “new bloody nose “for workers of the group.

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