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From October 24, in all newly subscribed retirement savings plans (PER), you will have to invest part of your savings in unlisted assets, otherwise called private equity or investment capital. Explain to us…
It is article 35 of the green industry law which requires it and which will come into force on October 24. In all PERs subscribed after this date, all management profiles by horizon must include a portion of private equity and therefore investment in companies, SMEs or ETIs, not listed on the stock exchange. When you open a PER, by default and if you do not choose to manage your savings yourself (free management), your payments are based on the management profile with a so-called balanced horizon. You can also choose to invest in this same type of profile, but more cautious, or more dynamic or downright offensive.
Which gives us four management profiles on the horizon. The financial supports contained therein are more or less risky depending on the type of profile chosen (prudent, balanced, dynamic or offensive) and depending on the time remaining until retirement. All these profiles, even the most dynamic, are in fact progressively secured on less and less risky supports as they approach retirement age. These are the profiles which must, from October 24, include a more or less significant share of private equity (there will be more in the offensive profile, up to 15%, than in the cautious profile, up to 6 %). The share will be highest thirty years from retirement and will then gradually decrease over time, until reaching 0% five years from the term, in all profiles, offensive as well as cautious.
Private-equity: everything you need to know about this ultra-profitable investment reserved for informed savers
Which savers holding a PER can escape it ?
Those who subscribed to a PER before October 24, 2024 are not affected. And those who opened one after this date will also be able to escape it if they decide to manage their savings themselves within their PER (so-called “free” financial management), outside of any horizon management profile.
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Is it a good idea to put investment capital in your PER ?
This can be understood. As there is a tax exemption on entry – the payments are in fact deductible from taxable income, within a certain limit – the public authorities require in return a contribution from the PER to the financing of the economy and in particular of SMEs and Unlisted mid-sized companies. Furthermore, private equity funds are not liquid – it is impossible to withdraw your savings before a certain period. This lack of liquidity is not a problem in PERs, which are themselves (with some exceptions) blocked until retirement age.
>> Our service – Compare the performance of retirement savings plans (PER) using our simulator
What about the financial performance of private equity? ? According to France Invest, they reach 13.3% per year over ten years to the end of 2023…
The private equity funds used in PERs are less profitable than that. According to our calculations, their performance is more around 5 to 6% per year. This is less than an investment in shares which returns on average 7% per year and which allows you to double your capital in fifteen years. The funds most used in PERs (the so-called “evergreen” funds) are not fully invested in private equity, which hampers final profitability.
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