Voluntary payments
By making voluntary payments into your plan, you can top up your savings in preparation for your projects and receive an employer contribution or potentially a tax deduction, depending on your scheme. How can you make the most of their advantages and what are the options available to you? Explanations.
Key information
Benefit from potential tax savings
Depending on your scheme, voluntary payments may be deductible from your taxable income.
Receive a possible contribution from your employer
Depending on your scheme and your company, you may receive an employer contribution to top up your own payments.
Top up your savings at your own pace
You may make one-off payments into your plan or arrange a standing order.
How does it work?
You have the option to make additional payments in order to top up the savings that have accumulated in your savings schemes¹. These payments will increase your savings and therefore any future annuities you will receive. Depending on the scheme, these payments may be tax deductible up to a deductibility threshold calculated each year based on your household’s income.
You can:
- make one-off payments to top up your savings whenever you wish.
- or schedule regular payments that you can incorporate into your budget and use to smooth out your investments over time so as to limit the impact of market fluctuations on your savings. Your decision will thus enable you to reduce the risk and optimise the return on your savings.
Worth noting: your company may opt to top up the payments you make into your PEE, PERCO, PERECO, PERU schemes by making an employer contribution, the terms and conditions of which are described in each scheme’s agreements or rules. This advantage not only supplements your savings with a contribution from your company, it is also exempt from income tax (it is subject to CSG social security contributions and CRDS social debt repayment contributions) as are the capital gains generated from this employer contribution in the event of a withdrawal (although they, too, are subject to these social contributions).
How do voluntary payments become tax deductible?
Payments made into a PERECO, PERU, PEROB or Article 83 plan may be deductible from your total taxable net income within certain limits stipulated by law. This ceiling is calculated for each individual and varies from one year to the next.
How to calculate the maximum amount eligible for a tax deduction?
To calculate how much you can actually pay into a scheme and thus deduct from your taxable income, you must subtract from the deductibility threshold the payments you have made into retirement savings plans:
- Payments made the previous year into plans held through your employer:
- compulsory contributions paid by your employer or yourself into an Article 83 or PEROB¹ plan;
- the contribution paid by your employer into a PERCO, PERECO, PERU or PEROB plan;
- monetised paid leave transferred to an Article 83, PERCO PERECO, PERU or PEROB plan up to a maximum of 10 days per year, or 10 days of unused leave in the absence of a TSA.
- Voluntary payments that you have made during the current year into a PERP (popular retirement savings plan), Article 83, PERCO, PERECO, PERU or PEROB plan or into a Préfon, Corem, Cegos supplementary pension scheme (if you are a civil servant).
N.B. When paying into a PERECO, PERU or PEROB plan, you may opt to make non-deductible payments (e.g. if you are not taxable or have exceeded your deductibility threshold). These payments will enable you to pay a lower tax rate when you withdraw your retirement savings as an annuity and/or lump sum.
How are your payments invested?
You may allocate your payments to one or several investment vehicles depending on your risk profile and the timeframe of your projects. These vehicles invest in the financial markets. There is a risk of loss of capital.
Depending on your scheme, you may also opt for manager-guided investment. In this case, we will allocate your payments to the investment vehicles available on your behalf. Your savings will be allocated automatically each year depending on the number of years left before you carry out your project or take your retirement. The aim is to gradually secure your savings by investing them in low-risk vehicles as the selected maturity date approaches and by gradually decreasing the share of savings invested in higher-risk vehicles.
1 If permitted under your savings scheme. Voluntary payments do not apply to Article 39 plans.
2 Schemes offering tax deductions on voluntary payments include: the PEE (company savings plan), PERCO (collective retirement savings plan), PERECO (collective company retirement savings plan), PERU (single company retirement savings plan), PEROB (mandatory retirement savings plan) and Article 83 plan.