PER: Retirement Under Constraints
An amendment to the 2026 finance bill aims to require holders of a Retirement Savings Plan (PER) to fully liquidate their contract upon retirement. The stated objective is to limit tax-free transfers. In reality, this measure could disrupt one of the pillars of France's capital accumulation system.
The Retirement Savings Plan (PER)
Launched in 2019 to encourage the creation of additional income, it has become one of the favorite investment options for the French: over 11 million contracts have been opened, including 4 million individual ones. It attracts investors with its flexible withdrawal options (choice between lump sum and annuity) and its favorable tax treatment upon entry (deduction of contributions from taxable income). However, an amendment proposed as part of the 2026 Finance Bill threatens this balance. The provision requires that savers must liquidate their PER upon retirement, ending the possibility of retaining the invested savings for later transfer.
What This Says About the System
This measure comes at a paradoxical time. While the pay-as-you-go system is under strain and the average replacement rate is decreasing, the government seems to be undermining one of the few popular capitalization plans. The option to keep a retirement savings plan after retirement allowed for the management of longevity risk and the adjustment of withdrawals to actual needs. By mandating immediate liquidation, the State enforces a uniform budgetary timeline on very diverse individual situations.
Another Unintended Consequence: The Lifetime Annuity
Proposed as an alternative, it remains unpopular. Considered rigid, expensive in management fees, and difficult to transfer, it only appeals to a minority of savers. According to the French Insurance Federation (FFA), barely 12% of opened PERs result in an annuity. By forcing the liquidation of capital, the government risks accelerating shifts towards more flexible products—such as life insurance, securities accounts, or structured products.
This content has been automatically translated using artificial intelligence. While we strive for accuracy, some nuances may differ from the original French version.
