Employee savings glossary

Arbitrage consists of modifying the breakdown of savings between the various investment vehicles on offer within the same employee savings plan.

A debt security (i.e., which represents a debt) that can be issued by a company, that must be reimbursed at a date and for an amount set in advance, and which bears interest. During its lifetime, the value of a bond increases or decreases.

Gain resulting from the difference between a share's selling price and its acquisition or subscription price. If this difference in negative, the loss is called a "capital loss".

A mechanism where contributions come from an employee savings plan that allows a company's employees to accumulate, with the support of their employer, long-term savings under favourable tax and social conditions. Savings become available for release upon retirement and can then be paid out in the form of an annuity or a lump sum, under the conditions set out in the regulations governing the PERCO. In the event of early release, savings are paid out as a lump sum.

The company employee savings plan is designed to bring together all existing retirement products. It has three dedicated compartments: one for voluntary savings contributions, one for employee savings contributions and one for mandatory contributions. It allows a company's employees to build up, with the support of their employer, savings invested in a specific class of employee savings funds (FCPEs, etc.) ligne d under a tax- and social security-efficient regime in exchange for a lock-in until at least the legal retirement age.

A mechanism where contributions come from an employee savings plan that allows a company's employees to accumulate, with the support of their employer, savings invested in collective investment products specific to the employee savings plan (FCPE, etc.), which benefit from favourable tax and social treatment, in exchange for a lock-in period of these savings set out in the regulations of the employee savings plan (minimum of five year), unless eligible for early release.

Mandatory legal system in companies of 50 employees or more (optional below 50) which enables employees to receive a share of the profit generated by their company.

A written agreement between a company's management and the employees or their representatives setting out the conditions for allocating compulsory profit sharing income to employees.

Social security contributions on the amounts paid by the company to its employees (optional profit sharing, compulsory profit sharing, employer contributions, etc.). They are deducted at source by the employer and paid to the URSSAF (French social security contribution collection agency).

The DIRECCTE was formed following the merger of nine bodies including the former DDTEFPs (Regional departments of work, employment and vocational training).

Income from an equity investment (shares, investment certificate). The dividend is generally paid each year and varies according to the profit generated by the company.

An FCP reserved for the employees of one or more companies, with contributions coming from the employee savings plan. The FCPE has a Supervisory Board whose role is to ensure the correct operation of the fund and to provide prior consent for certain changes that impact the fund.

Savings from compulsory and optional profit sharing, voluntary payments and all amounts paid into an employee savings plan (PPE, PERCO, etc.). Savings may also come from an employee share ownership plan which allows employees to acquire shares in their company or a company from the same group (capital increase, free shares, stock options, etc.).

Additional financial contribution paid by the company when an employee makes a payment to an employee savings plan.

Title of property representing a part of the equity of the company which issues them; shares may pay a dividend and offer voting rights to their owner during shareholders' meetings. Shares may be listed on the stock market, but this is not mandatory.

A compulsory profit sharing agreement may include the allocation of the compulsory profit sharing income to a Fund that the company must use to finance investments. Employees therefore have a claim entitlement on their company in the form of locked-in current accounts opened in the name of the company's employees.

Share of optional profit sharing due to each employee.

A company founded under one of the forms established by law and specifically licensed to carry out the transactions set out in insurance contracts.

A title of property which, like shares, pays a dividend. However, it does not offer voting rights at shareholders' meetings.

A collective fund of securities that issue units. An FCP is managed by an asset management company that acts on behalf of unitholders and represents them with regard to third parties in all fund-related acts.

Reserve established by a company that introduces a compulsory profit sharing agreement (under certain conditions) and/or pays employer contributions as part of its PERCO. This reserve allows the company to finance the investments that it intends to make in the next two years and to deduct the amount placed in the reserve from its tax base.

A limited liability company which issues shares and whose purpose is the management of a portfolio of marketable securities. SICAV shares are issued and may be bought back at any time by the company at the request of its shareholders and at their net asset value plus or after, where applicable, fees and commissions.

Unit value of a SICAV share or an FCP (or FCPE) unit, calculated by dividing the net asset value of the SICAV/FCP (or FCPE) by the number of shares or units issued. Share and unit subscriptions and buybacks are carried out at this value, less any subscription or buyback commission.

A voluntary savings plan which allows a company to pay its employees amounts calculated according the company's earnings or performance.

A written agreement between a company's management and the employees or their representatives setting out the conditions for allocating optional profit sharing to employees.

This cost is used to calculate the capital gain generated by the FCPE unitholders when they redeem their assets.

Share of the special profit-sharing reserves due to each employee.

Ceiling established by decree for the calculation of French social security contribution. Please find out more about the Social Security Annual Limit in the latest news.

Tax contributions, but of a social nature, due by savers who own units in an FCPE. They are withheld from income received by the saver (capital gain on disposal, etc.).

The share of a company's profit due to employees under the compulsory profit sharing agreement.

A mechanism which allows a company to allocate options to an employee, i.e., the right to subscribe to or purchase a set number of company shares at a price fixed on the day that they are attributed and within a pre-defined time scale. Once this period has expired, the employee may exercise his/her options, i.e., purchase the shares at the agreed price (usually calculated to be less than the market value, when the shares are listed on the stock market).