When you retire, you are entitled to a basic retirement pension, as well as a supplementary pension. But what is a “supplementary” pension? Sometimes called a “supplementary pension”, it can be added to your other pensions, but has no obligation criteria. The supplementary pension is thus optional since it does not depend on organizations or unions, unlike the basic pension or the supplementary pension. Explanations.
In general, the “supplementary” pension works on the principle of capitalization. To benefit from it, you must accumulate contributions on a financial product, which will allow you, when the time comes, to receive a capital or a life annuity. It is therefore necessary to take out this supplementary pension with a banking institution, an insurance or provident company. If you are self-employed or a business manager and you do not contribute enough to the general social security system, it is an ideal solution for you.
The supplementary pension allows you to prepare for your retirement more serenely: you freely make the payments that will create this pension, available at the end of your professional career. Regarding the declaration of this supplementary pension, the introduction of the withholding tax led to the creation of specific headings in the tax declaration. If you are domiciled in France, the withholding tax will be deducted by the paying agency.
There is an individual or company supplementary pension. For an individual subscription, it can be added without problem to the mandatory retirement. It is a strategy put in place to allow savings to grow with a view to retirement. It is possible to create it in the form of a Retirement Savings Plan (PER), life accident insurance or even a stock savings plan (PEA).
Some companies can thus offer you a supplementary pension system. This procedure has been developed with the aim of retaining and motivating the teams. In addition, the sums paid by the company to the pension fund are tax deductible. It is therefore a solution that benefits both the employer and the employee.
After constituting an “additional” pension, the life annuity generally stands out as the most effective exit route for earning additional income. To calculate its amount, several criteria are taken into account such as the total amount of savings accumulated on the product, your age at the time of liquidation or your estimated life expectancy on the basis of mortality tables established by INSEE. . It is from these data that the life annuity can be estimated.
Thus, when your professional activity ends, this pension can be paid monthly, quarterly or annually, until your death. If you live longer than the calculated life expectancy, the organization with which you have taken out your “supplementary” pension will then be responsible for financing the next payments.