- 3'15 min
Unclaimed pension savings: a law could improve the information provided to beneficiaries
On 22 June, the French National Assembly voted at first reading on a bill designed to tackle the problem of unclaimed supplementary pension policies by reinforcing the obligation to provide information to beneficiaries.
Pension savings policies: €13 billion not handed over to beneficiaries
At the end of 2018, approximately 13.1 million French people held a supplementary pension policy in order to boost their basic compulsory and top-up pensions. According to the French Prudential Supervision and Resolution Authority (ACPR) and the Court of Auditors (Cour des Comptes), the total amounts invested in policies that remained unclaimed by their policyholders upon reaching the legal retirement age (62 years old), amounted to nearly €13 billion in 2018. Although a minority of policyholders may be aware of the existence of such savings and do not wish to collect them, it seems that in the majority of cases, policyholders do not liquidate their policies because they are simply unaware of their existence.
The vast majority of these people are likely to be policyholders over 70 years of age who were beneficiaries of compulsory collective policies taken out by their companies (under the former “Plan Epargne Retraite Entreprise” [corporate pension savings plan]), known as “Article 83” policies with fixed contributions, or “Article 39” pension policies with benefits defined in advance, etc.). In fact, these policies are taken out by employers for their employees, and not directly by the latter. As membership of such schemes is automatic, some employees are not informed of the existence of savings accumulated in their favour, and when they leave their company, they are unaware, or have forgotten, that the company had taken out a retirement savings policy on their behalf. In addition, policy managers may lose track of beneficiaries when they move to a different post or address.
The bill passed by the Assembly aims to improve the information provided to beneficiaries
The purpose of the bill proposed by Member of Parliament Daniel Labaronne (LREM Party) and passed by the National Assembly on June 22, is to ensure that working people and retirees are better informed about any supplementary pension policies taken out on their behalf so that they can collect the amounts owed to them upon retirement. To this end, the bodies responsible for managing supplementary pension policies will be required to send information about their clients to Union Retraite, the public interest grouping (GIP) that runs the “Info Retraite” online portal (which already provides access to information about the mandatory basic and top-up pension schemes). The GIP will then provide policyholders with information summarising their entitlements under these policies. A communication campaign targeting the general public will publicise the new “Info Retraite” features related to supplementary pensions.
For their part, companies will be required to inform departing employees about any savings policies taken out on their behalf, by entering them in their employee savings passbooks.
These new provisions could be implemented by mid-2021, or by 1st January 2022 at the latest.
It should be noted that this bill, if definitively adopted, will supplement the existing regulatory provisions governing unclaimed bank accounts and life insurance policies which, due to certain characteristics of supplementary pension policies (no term, withdrawal of funds as income payments, etc.), have not completely resolved the problem of informing policyholders who are unaware that they have such policies.
Sources: DREES, Les retraités et les retraites, pub. 2019; Court of Auditors, Annual Report 2019; Bill on unclaimed supplementary pension policies, adopted by the French National Assembly on 22 June 2020; Interview with Daniel Labaronne, Moneyvox, on 22 June 2020