Finance Glossary
PEI (Intercompany Savings Plan)
What is a PEI?
The PEI (Intercompany Savings Plan) is a savings plan shared by several companies and offered to all employees. It allows any employee of companies that have adopted this collective savings system to build savings invested in FCPE shares benefiting from favorable tax conditions.
The PEI has the same characteristics as the PEE, except that it cannot be invested in the company's own shares. It can be funded by profit-sharing, employee participation, voluntary contributions decided by the employee, and possibly by additional matching contributions from the company. In return, the savings are locked in for a minimum period of 5 years, except in specific cases of early withdrawal: purchase or expansion of the primary residence, marriage, birth of the third child, departure from the company, death...
How to set up an IEP (Individualized Education Plan)
Membership in the PEI can be achieved:
– By collective agreement.
– By agreement between management and the authorized representatives of representative trade union organizations.
– By agreement within the Social and Economic Committee (CSE).
– By ratification by a two-thirds majority of the staff upon joint request of the employer and the trade union organizations or the CSE when at least one of these bodies exists.
– By unilateral decision of the employer:
- if there is no CSE (The CSE is mandatory if the workforce reaches at least eleven employees for twelve consecutive months) or no trade union delegate,
- or if a CSE and/or trade union delegate exists but negotiations with the staff have failed. The CSE is then consulted on the draft plan regulations at least 15 days before its suQuels sont les avantages du PEI pour l'entreprisebmission to the administrative authority.
What are the advantages of the PEI for the company?
– Employer contributions are deductible from taxable profit and exempt from employer social security charges.
– Exemption from social contribution on:
Employer contributions and profit-sharing paid by companies with fewer than 50 employees.
Incentive bonuses only, paid by companies with fewer than 250 employees.
– Employee retention and motivation by allowing them to build savings under preferential conditions.
– Enrollment in the PEI does not need to be filed with the Regional Directorate for Economy, Employment, Labor, and Solidarity.
What are the advantages of the PEI for the beneficiaries?
– Possibility of company matching contributions that increase employees' savings.
– Matching contributions not subject to income tax within the exemption limits.
– Exemption from tax on capital gains and income, excluding social contributions.
– Coverage of certain account maintenance fees and, if applicable, entry fees by the company.
– Possibility to keep the savings in the PEI beyond the lock-in period. Employees continue to benefit from social and tax exemptions. The portion of their assets that becomes available can be reimbursed at any time upon request.