PACT Act :
Easing of & rsquo; retirement savings ⎜
The main impacts for life insurance
⎜ The PACT Act (Plan & rsquo; Action for Growth and the Transformation of companies) aims to give companies the means to innovate, to transform, to grow and create jobs.
Built on a model of joint development with all stakeholders, Bill was voted on first reading to the & rsquo; National Assembly 9 October 2018. Its passage in the Senate is scheduled for January 2019.
Ten emblematic measures were defined by the project to give companies the means to these measures croître.Parmi, one of them particularly affects life insurance companies :
Simplification and portability of products & rsquo; retirement savings.
Currently four products are available to retail investors. Each has its own special features without possibility of transfer.
The LOSE, is a savings product employee collective in nature. All employees of a company have access without discrimination. It is the subject of a joint enterprise agreement.
The Madelin is a contract Individual Life Insurance adapted to Non-salaried workers (TNS), that is to say, artisans and professionals.
The PERP is a contract Individual Life Insurance intended for special. Each employee can benefit at will.
These products, for different populations, are being multiplied to an active changing jobs several times. They will end up with several incompatible contracts whose specific rules make increasingly opaque.
otherwise, transfer impossibility makes low profitability (no pooling of capital) and shows high fees (uncompetitive products).
The PACT Act proposes a profound change. It sets common rules to all retirement savings plans. The new framework would be called simply PER.
Existing products will be harmonized and restructured by nature as follows :
• Two Products collectives
– Product categorical : PERE
– Product Universal : LOSE
• A product Individual
In addition to this harmonization, the following benefits will be implemented :
> total portability contracts.
Today, it is only possible to transfer a PERP to another insurance company or turn a Madelin contract PERP. With the PACT Act, portability will be possible to & rsquo; one product to another, whatever their nature. This will, d & rsquo; part, d & rsquo; increase the profitability of the funds through a single savings, and d & rsquo; other, reduce contract management costs. Added to this is free (Beyond 5 years) or capping the transfer fee which should also help reunite contracts on a single product.
For life insurance :
This freedom of portability will encourage & rsquo; retirement savings in favor of the more interesting contracts for the investor. Products must be legible and attractive.
> Generalization of the controlled management
In order to & rsquo; increase performance while securing contracts to & rsquo; s approach retirement, the law provides to generalize a management option driven on all products & rsquo; retirement savings. The insured will have the opportunity to delegate fully or partially manage its investments to experts, taking all or part of decisions for him, following its risk profile.
For life insurance :
This option establishment strengthens the role of financial expert told the insurance company. Asset management is a competitive lever.
> Generalization of capital out of choice or life annuity
The early redemption (hitherto only possible in case of death or heavy dependence) would be expanded by making possible the release for the & rsquo; purchase & rsquo; a principal residence. The reflection leading to say that it is very early savings which we will have only very late, or maybe not, withers by this measure.
For life insurance :
Approaching retirement savings becomes possible much earlier in the professional life of the insured. pension products become a long-term savings available shortly.
In conclusion, the reform of the & rsquo; retirement savings proposed by the PACT Act comes dust hitherto very opaque products and therefore very sluggish.
The market becomes more open because the insured have a better reading of the products and especially the possibility of challenger competition. They can be sensitized much earlier, because it is no longer only a very long term savings. They have the ability to predict their future to which is added the flexibility to benefit from available capital in case of home ownership, all in a favorable tax environment.