TotalFinaElf harmonises plans
TotalFinaElf employs what it calls a harmonised package of supplementary pensions and savings plans. The group has shown a willingness to put in place new common personnel administration procedures within group companies designed to facilitate mobility.
The approach fits in with the new legal framework for long and short-term savings schemes that was introduced by the Loi Fabius of 19 February 2001. The law allows for the redeployment of occupational savings schemes to include favourable tax breaks.
The employees of nine companies in the Petrole France sector are covered by a three-tier plan, which incorporates a traditional collective and mandatory supplementary pension instrument with both defined benefit and contributions elements, called Recosup.
The plan also includes a new long-term pensions-specific occupational savings plan within the framework of a PPESV (Plan Partenarial d’Epargne Salariale Volontaire – voluntary savings related plan).
Additionally it includes a supplementary savings system in the form of a PEC (Plan d’Epargne Complementaire – supplementary savings plan). Common areas between the RECOSUP and the PPSEV include the fact the employee chooses how the assets from their contributions are managed, while in both the asset management is ‘guided’ by an insurance or management company, taking into account the employees’ age and time until retirement.
The management style allows for investments to be optimised and the groundwork has been laid to allow a progressive mutation of risk relative to the individuals’ accumulated capital via the influx of new contributions/payments and by consolidating investments with the smooth transfer of assets every three months from higher to lower risk products during the last few years prior to retirement.
The RECOSUP is a collective bargaining contract with mandatory participation for all employees. It is a defined contribution plan with a contribution rate of 0.5% from the employee and 1% from the employer. The fund is managed on a capitalised basis by CNP Assurances.
Benefits of the RECOSUP plan include a double guarantee on capital and a minimum return rate in line with insurance regulations. The RECOSUP allows employees to invest via three Fonds Commun de Placement (FCPs) with the first split 80%/20% in favour of equities, the second 50%/50% equities/bonds and the third split 80%/20% in favour of bonds. CNP Assurances determines where it places assets according to an employees age, with the first being chosen by employees under 45 years, the second for workers aged between 45 and 49, and the last for employees between 50-54.
Employees also have the choice of five different fund allocation possibilities that include different combinations of euro cash funds and the FCPs. The selected option is renewed each April unless modified.
A 100% cash option is obligatory for employees over 55 years of age. Upon retirement an employee’s accumulated capital is converted into a life annuity.
The PPESV is optional to employees, but those who do participate are subject to monthly payment limits of e13 maximum per month or e156 per annum. This is increased by an investment bonus of 300% allowing an additional payout of e39 per month (e468 per annum). A second monthly payout can also be added. This comes out to a 0.32% maximum of gross salary, increased by 300% as above.
The assets must be saved for a minimum 10-year period, except in exceptional cases. At retirement, the employee may opt to take regular payments or a single or several predetermined lump sums.
Management of the PPESV is either ‘guided’ by AXA, depending on the number of years an employee has left before retirement, or self-determined by the employee who can choose how much to invest among eight FCPE (mutual funds). Under the guided management programme, employees can choose from four fund profiles. This allocation profile remains in place until retirement.
TotalFinaElf also runs a supplementary savings plan (PEC), again with optional participation and fixed monthly payments designated by the employee up to e1,080 per year. Employees may choose to invest assets among seven mutual funds and there is a five-year minimum saving period.
In terms of scheme communication, for both the PPESV and the PEC, members receive a statement of account giving full details of the position. Members also have permanent access via Minitel and the internet and a dedicated client helpdesk for employees.