New retirement savings plans: watch out for costs

The new retirement savings plans (PER) are very successful with 2.8 million savers in fifteen months and, in total, the stock of retirement savings was 269 billion euros at the end of 2020, against 230 billion in 2018 indicates a report by Corine Dromer, the president of the Consultative Committee of the Financial Sector (CCSF) published on Tuesday, July 20.

Their creation by the law of 22 May 2019 relating to the growth and transformation of companies (Pact) « has given a considerable boost to dedicated retirement savings and has helped raise awareness among younger generations of the importance of building up additional retirement savings. These changes made the retirement savings product easy to understand and attractive. », is welcomed in the text of the president of CCSF.

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However, the report, commissioned on February 18, 2021 by Bruno Le Maire, the Minister of the Economy, highlights several problems that could slow down its development. First, « the costs of individual insurance PERs, which include the costs of insurers and the costs of management companies, are numerous, whatever the actors and the contracts considered, and this accumulation of costs weighs on the performance of contracts, all the more so in an environment low rate », underlines the report. For example, the sum of the management fees already amounts to nearly 3%, without even counting the other costs (on payment, arbitration, etc.).

Then, the report regrets that the information on these costs is « not very accessible on the websites of many establishments with very fragmented information ». A situation which does not allow those who want to invest for their retirement to easily compare the rates in order to choose their contract.

More competition

The report nevertheless points to the appearance of « new simplified offers adapted to a large audience: low costs and limited in number, digital marketing with complete information and accessible via the Internet and allowing the constitution of painless savings with voluntary payments of small amounts ». Will these offers be an incentive for more competition and will they allow prices to be lowered? « In this regard, the emergence of a PER offer in securities account of a large banking network could contribute to this. », notes the report.

In the meantime, the report of the president of the CCSF recommends that each prospect benefit « full information on fees before subscription ». He then asks that the subscriber of a PER receive on his annual information statement a detail of all the costs that affect his savings. In the medium term, a PER costs observatory like the bank fees observatory set up in 2011 could be created. Nevertheless, the work carried out by Sémaphore Conseil for this report by the president of the CCSF shows that this implementation will only be possible if the promoters of PER make the pricing information more accessible.