Employee savings: PEE and PERCO at CIC
Some companies offer their employees a profit-sharing and/or incentive plan. Employees then have the choice of receiving these bonuses in cash or investing them in their company savings plan: PEE or PERCO (focused on retirement). If profit sharing is received immediately, it is subject to income tax and social charges. If it is invested in a company savings plan, it benefits from tax and social exemptions. Only CSG and CRDS are deducted at a rate of 9.7%.
Paying bonuses into these plans can therefore be interesting, and the benefits may be further enhanced by additional matching contributions from the employer. Convinced savers can also make voluntary contributions.
The money thus invested will be placed in financial assets and locked in for 5 years for the PEE or until retirement for the PERCO. During this time, savers may potentially generate a capital gain... or see their capital melt away like snow in the sun. It is therefore necessary to take the time to consider whether the investment is worth it.
The real benefit for employees is making the right choices between investing or depositing into their bank account. If they choose to invest in their PEE or their PERCO, they will then need to select the right financial assets and assess the impact of fees.
What are the fees on the CIC's employee savings plan
First off, it's important to know that CIC charges an annual account maintenance fee of €29. Therefore, it seems pointless to wish to place a profit-sharing or incentive plan, the amount of which would be a few hundred euros. Over 5 years, which is the blocking period for PEE (company savings plan) money, the cost already amounts to €145. To overcome this, the generated return would need to be much more significant - yet nothing is guaranteed. Especially as each investment fund also has its own fee policy. Therefore, careful analysis is crucial.
In short, the lower the amount to be invested, the less attractive the company savings plan investment becomes. The impact of fees is all the stronger, and the potential for profitability all the more limited. When browsing the Internet for CIC employee savings reviews, it's not uncommon to find people disappointed about losing money due to the combined effect of fees, the decrease in stock market valuations in recent years, and invested amounts representing a few hundred euros.
Choosing your investment funds within CIC Employee Savings
When they have an Employee Savings Plan (PEE) or a Collective Retirement Savings Plan (PERCO) opened by their employer at CIC, employees have a choice between several investment funds, here called FCPE. Sometimes a preselection may have been made by the employer. The bank, however, offers a range of 25 funds, all managed by Crédit Mutuel. They include equity funds, bond funds, mixed funds, and money market funds.
25 choices may be few, but it's enough for the general public who don't want to waste time looking for funds among hundreds of options. However, it's regrettable that funds managed by other asset management companies are not available.
As with any investment, the saver here will have to study the possibilities and choose according to his convictions. The first filter is the risk factor of each FCPE: these are rated from 1 to 7 on a scale of 7. The higher the number, the higher potential return and risk of loss.
The second part of the analysis will concern the history of the fund. While past performances don't allow envisioning a future of the same kind, a fund with poor performances for years is unlikely to improve in the coming years.
The last aspect of consideration will - once again - concern the fees. Each fund undergoes its own fee policy. Some may have entrance and management fees. Altogether, this will have another impact on potential portfolio returns, especially in a downturn. To know and understand everything, individuals must consult the information documents of the different funds, named "DIC". They will particularly discover the fees and their impact, alongside the investment strategy. The Crédit Mutuel website also provides the performance history of each one.
Available supports within CIC employee savings
Most are compartments of other investment funds dedicated to employee savings, which adopt similar strategies.
The financial supports offered by CIC are:
- 8 funds that invest in shares in Europe, with varying annual performances (a minimum of -42% to a maximum of +47% depending on the year and the fund) for a risk level of 5 to 6/7,
- 3 funds that invest in international shares, with annual returns ranging from -23% to +28% depending on the fund since 2016 for a risk of 5 to 7/7,
- 7 mixed funds, with annual performances of -17% to +15% since 2016, with a risk level of 3 to 4/7,
- 6 bond funds, with reported annual returns between -14% and 6.88% since 2016 with a risk level from 1 to 3,
- 2 money market funds, with a risk of 1/7 and annual returns ranging from -0.6% to 3.24% since 2016.
For those wishing to invest, the best strategy is to blend across multiple asset classes and risk levels.
