RETIREMENT INSURANCE: PRINCIPLES
By definition, pension insurance is a solution that guarantees a peaceful and serene retirement for employees reaching the appropriate age, particularly with a view to maintaining their current standard of living.
In France, retirement insurance is managed by a system composed of three schemes, namely the basic or general scheme, the supplementary scheme and the various forms of retirement savings, whether collective or individual. The latter are generally managed by insurance companies.
Today, there are several types of insurance contracts that fall within the framework of supplementary retirement. But as a general rule, they are the following:
- contracts with specific contributions,
- contracts with defined benefits,
- end-of-career indemnities, and
- excess earnings contracts.
It is important to note that the majority of pension solutions offered by various insurance companies are based on the "Madelin law".
For information, this law dates from February 11, 1994 and aims to provide employees with the opportunity to benefit from a complementary retirement pension. These are mainly the result of the payment of tax-deductible contributions.
Most of the retirement insurance contracts are available according to the status of the worker: employer, executive or simple employee as well as according to the sector of activity: civil servant, liberal professions or private.
RETIREMENT INSURANCE: THE THREE MAIN TYPES
The operation of a retirement insurance is more or less similar to that of a life insurance.
There are currently three main families of retirement insurance contracts, namely :
- the contract intended for majority managers,
- the contract designed for liberal professions, craftsmen and medical professionals,
- as well as the contract dedicated to "simple" employees.
The first type of contract involves the payment of contributions. In more explicit terms, this insurance family is a capitalization contract and its subscription is the company's mission. The solution will be categorized in the company's expenses, more precisely, in the deductible expenses.
As for the second family of contracts, it also takes the form of the payment of contributions.
If taken out individually with an insurance company, retirement insurance for the liberal professions is a capitalization insurance contract which, unlike the first category, is deductible from the IR or Income Tax.
As for the insurance contract reserved for employees, it is subscribed by companies for their employees and is declined in several types, to quote only the contract by short-term and long-term capitalization as well as the contract on the long term by annuity, intended for a quite distinct family of employees. This last category is frequently referred to as the Article 83 contract.
Retirement insurance contracts are very beneficial complementary resources for retirees who cannot restrict themselves to the income provided by the general and conventional complementary schemes. It is necessary to note that there are still different solutions offered by the various insurance institutions, to mention only the individual contract denominated in units of account.