French Insurance Code
In forceI. - The popular retirement savings plan is a contract governed by article L. 141-1 , the execution of which is linked to the cessation of professional activity and which is subscribed by an association governed by article L. 141-7 called a popular retirement savings group.
The purpose of the contract referred to in the first paragraph is the acquisition and enjoyment of personal lifetime rights payable to the member from the earliest of the date of liquidation of his pension under a compulsory old age insurance scheme or the age set in application ofarticle L. 351-1 of the Social Security Code. The contract may also provide for the payment of a lump sum on this same date, provided that the surrender value of this benefit does not exceed 20% of the surrender value of the contract.
The contract may provide additional guarantees in the event of the death of the member before or after the date on which the life annuity acquired under the plan becomes payable. The benefits paid under these guarantees consist of a life annuity paid to one or more beneficiaries expressly designated by the member or, failing that, to his or her spouse, or a temporary education annuity paid to minor children. These additional guarantees may not have the effect of transferring rights that would exceed those to which the member would have been entitled in the event of his or her death. The contract may also provide, in the event of the member's disability occurring after enrolment, for the payment of a disability annuity for his exclusive benefit, without this benefit having the effect of granting him rights which would exceed those to which he would have been entitled without disability.
Notwithstanding the provisions of the second paragraph of this I, a member may request the surrender of a contract from an insurance company authorised in application of article L. 321-1 of this code, as well as from the insurance organisations mentioned in article L. 144-4, if he meets the following conditions:
1° The transfer value of the contract is less than €2,000 ;
2° For policies that do not provide for regular payments, no contributions have been paid in the four years prior to the surrender; for policies that provide for regular payments, the policy was taken out at least four completed years prior to the surrender request;
3° The income of the taxpayer's household for the year preceding that of the surrender is less than the sum, increased where applicable by the additional half-parts used to calculate the income tax relating to the said income, provided for in II of article 1417 of the General Tax Code.
The Plan d'Epargne Retraite Populaire also aims to build up savings earmarked for the purchase of the member's principal residence as a first-time homeowner, as referred to in the first paragraph of I of article 244 quater J of the French General Tax Code, from the date of liquidation of his/her pension under a compulsory old-age insurance scheme or from the age set in application of article L. 351-1 of the French Social Security Code, payable, on this due date, by a lump-sum payment.
The rules specific to the legal forms under which the popular retirement savings plan, the popular retirement savings group and the insurance company are set up apply subject to the provisions of this article.
II. - A supervisory committee is set up for each plan to ensure that the contract is properly executed by the insurance company and that the interests of members are represented, in accordance with the procedures defined by decree in the Conseil d'Etat.
It follows the rules applicable to the grouping's board of directors defined in article L. 141-7.
Where the group referred to in I of this article subscribes to a single plan, the association's board of directors may validly act as the supervisory committee for the said plan.
The supervisory committee may, at any time, ask the statutory auditors and the directors of the insurance undertaking for any information on the financial situation and actuarial balance of the plan. The statutory auditors are then released from their obligation of professional secrecy.
The Supervisory Committee shall arrange for any expert reports necessary for its work and may, to this end, appoint an independent expert to carry out any documentary or on-site checks on the administrative, technical and financial management of the plan.
Each year, the insurance company informs the Supervisory Committee of the amount allocated to the technical and financial profit-sharing and consults it on the terms and conditions of its distribution among the members.
The members of the Supervisory Committee are bound by professional secrecy with regard to information of a confidential nature and given as such by experts and persons consulted by the Supervisory Committee under the conditions and subject to the penalties provided for in articles 226-13 and 226-14 of the French Penal Code. Experts and persons consulted by the Supervisory Board are bound by professional secrecy under the same conditions and subject to the same penalties.
III. - The insurance undertaking shall inform the plan's Supervisory Committee at least once every quarter and shall submit to it, within six months of the end of the previous financial year, an annual report on the actuarial balance and the administrative, technical and financial management of the plan. This report is sent to the supervisory authority set up under Article L. 612-1 of the Monetary and Financial Code, together with the opinion of the Supervisory Committee.
IV. - The administrative management of the plan, including in particular the keeping of accounts recording the rights of members as well as informing each member of his rights, is carried out by the insurance undertaking or by a third party to whom the insurance undertaking delegates this management under its responsibility.
V. - The conditions under which the financial management of the People's Retirement Savings Plan is carried out by the insurance undertaking, and in particular the use of reinsurance or delegated management, are determined by decree of the Conseil d'Etat.
VI. - The insurance company exercises voting rights in the sole interest of the individual rights of members under the plan.
VII. - Notwithstanding the provisions of the Commercial Code relating to company accounts, the insurance undertaking shall draw up, for the operations covered by this article, auxiliary appropriation accounts. These procedures and records are audited and certified by the statutory auditor(s) of the insurance undertaking.
Article L. 134-4 applies to the assets and rights resulting from the accounting records established pursuant to the first paragraph of this VII.
The assets of the Popular Retirement Savings Plan are held by a single custodian separate from the insurance undertaking, which primarily provides the service mentioned in 1 of Article L. 321-2 of the Monetary and Financial Code and which is authorised in France, in another Member State of the European Community or in another State party to the Agreement on the European Economic Area.
VIII. - In the event of insufficient representation of the commitments of a popular retirement savings plan, Article L. 381-2 of this Code applies to the auxiliary allocation accounts mentioned in VII of this Article.
IX. - VII and VIII apply individually to each popular retirement savings plan managed by the insurance undertaking and meeting the threshold conditions. They apply collectively to all plans managed by the insurance undertaking which do not meet these threshold conditions. If, for a plan, these conditions are not met for eight consecutive years, contributions paid into a contract that no longer has a minimum number of members are no longer considered as contributions to a popular retirement savings plan.
A decree of the Conseil d'Etat determines the thresholds referred to in the first paragraph of this IX and the rules applying when they are exceeded.
X. - The Popular Retirement Savings Group files its Articles of Association with the authority instituted by Article L. 612-1 of the Monetary and Financial Code and is entered in a register kept by the same authority. It may only be dissolved in cases and under conditions defined by decree by the Conseil d'Etat.
The purpose of this grouping is to represent the interests of its members in setting up and supervising the management of the plan(s). It may not participate directly in the presentation of the plan(s).
XI. - The contract sets out the terms and conditions for financing the Popular Retirement Savings Group. The grouping does not receive any contributions from its members, with the possible exception of an entry fee.
XII. - The General Meeting decides, on a proposal from the Supervisory Committee, on any changes to be made to the essential provisions of the plan subscribed by the groupement d'épargne retraite populaire.
Except in the case of serious misconduct, the insurance company may only be changed after at least twelve months' notice and under the conditions stipulated in the plan. The choice of the new insurance company is subject to a competitive tendering procedure and is submitted to the General Meeting under the plan. It entails the transfer to the new managing insurance company of all the commitments and assets attached to the plan.
The Supervisory Committee examines whether, on expiry, to renew the contract taken out with the insurance company or to put it out to competitive tender. The decision to renew the contract with the insurance company is submitted to the General Meeting for approval. If the contract is reopened, the outgoing insurance company may not be excluded from the competitive tendering procedure.
