Persons Insurance


The Madelin law allows the tax deduction, under certain conditions, of the contributions paid by the self-employed worker to constitute a supplementary pension or supplementary benefit guarantees under Madelin contracts. 


Who is concerned by the Madelin contracts?

Are concerned persons subject to income tax in the category of industrial and commercial profits (BIC) or non-commercial profit (NBC): Members of the liberal professions: doctors, medical auxiliaries, lawyers, architects, notaries, bailiffs, etc. Individual farmers: traders, craftsmen; Non-employee managers of a partnership: EURL (sole proprietorship with limited liability), partnerships, limited partnership, partnership or de facto; The non-salaried majority manager of a SARL or a SELARL (limited liability company); The manager of a partnership limited by shares; EURL’s sole shareholder did not opt ​​for its corporate tax liability. The collaborating spouse not paid by the TNS.


What is the purpose of Madelin contracts?

The Madelin contracts allow non-salaried workers (TNS) to set up an additional pension and benefit from pension guarantees (sickness, maternity, incapacity for work, disability, death, dependency) and loss of employment. Contributions paid under these guarantees can be deducted from taxable income up to a tax ceiling. 


Contracts Madelin: what do insurers offer?

Insurers offer membership in a group insurance plan for retirement, pension and loss of employment suffered.


What are the conditions for taking out pension and retirement benefits?

The self-employed worker may only purchase pension and retirement benefits if he is up to date with his compulsory contributions and if he can justify them. If it were not up to date, it would be liable to a fine and its membership would be canceled.


How are the Madelin contract dues fixed?

Contributions must be regular in amount and frequency. With regard to pension and provident insurance, contributions must be paid at least once a year.


Is there a minimum amount of contribution?

For pension insurance, a minimum contribution amount is set for the subscription. Each year, this basic amount varies proportionally to the Social Security ceiling and the member may, if he wishes, change his contribution between the minimum basic amount fixed for the subscription and a maximum of 15 times this amount.


Can we contribute in the past years?

Members may make additional contributions to constitute an optional supplementary pension for the years between the date of their affiliation to the mandatory old-age insurance scheme and the date of their adhesion to the group contract. The amount of the additional contribution paid during a year is equal to the total amount of the periodic contribution paid for the same year. 


What are the possibilities of early release of Madelin contracts?

The law provides for early release in several situations: A second or third category disability of the insured person, that is to say a disability of at least 80% which prevents him from exercising a professional activity; A cessation of self-employed activity because of judicial liquidation (upon presentation of the Commercial Court’s judgment); The death of the spouse or the pacs partner; Over-indebtedness; A situation that justifies it according to the president of the commercial court in which is instituted a conciliation procedure; The expiry of the rights of the insured to the unemployment benefits provided by the Labor Code in the event of dismissal; The absence of a work contract or a corporate office for at least two years from the non-renewal of the term of office or dismissal for the insured persons who have held the functions of director, member of the executive board or board member supervisors, and did not pay their pensions in a compulsory old-age insurance scheme.


What is the Madelin law?

Law No. 94-126 of 11 February 1994, known as the Madelin law, promotes the voluntary constitution of supplementary social protection for non-salaried workers. The contributions paid under the Madelin law give right to tax deduction of the taxable profit. Among the various measures, the Madelin law initiates a retirement contract and a guarantee contract. To complete the protection of the TNS, the Madelin law includes in its insurance contract guarantees covering: Maternity, Incapacity for work, The invalidity, The death, The addiction. Finally, to reinforce the reimbursements of health insurance, the Madelin law introduces the mutual insurance contract dedicated to the TNS.


Who benefits from Madelin health contracts?

By definition, the Madelin law is addressed to: For the liberal professions: lawyers, architects, doctors, notaries … Merchants and craftsmen To non-employee managers of a partnership: EURL, partnerships, limited partnerships, etc. To the non-salaried majority manager of a SARL or a SELARL To the manager of a partnership limited by shares To unpaid co-workers The Madelin law does not apply to the mutual of the self-entrepreneurs.


How does the mutual Madelin law contract work?

Mutual law Madelin contracts are since 2016 framed by the decree on the responsible and solidarity contracts. To complement health insurance reimbursements, the TNS Madelin mutual insurance contracts generally cover some health care outside nomenclature in whole or in part (optics, dental care, alternative medicine, etc.). To benefit from the Mutual Madelin’s contracts, the TNS can not subscribe to any mutual insurance company. They must choose from the specific add-ons covering the particular risks associated with their activity. The amount of contributions depends on many criteria such as age, profession, department, etc. Mutuelles Madelin are available in two forms: Individual mutual contract providing the TNS and possibly the members of his family if they are his heirs, Mutual group contract generally offered to the majority manager. The Madelin law gives right to the tax deduction of contributions paid under the mutual. Refunds paid directly to the insured’s personal account do not have to be reinstated for tax purposes. If, with identical guarantee, a mutual Madelin is less expensive than that of an employee, its content framed by the principle of “solidarity and responsibility” makes it impossible to strengthen the guarantees of some health posts. To overcome some of the shortcomings of mutual Madelin, subscribe an additional health supplement can be useful. Allowing for a personalized choice of the most appropriate options for its own case, this third-level health supplement will generally cover non-coordinated medical expenses.


Who are the beneficiaries of the Madelin retirement?

The Madelin Retirement Contract is an optional contract reserved for self-employed and non-salaried non-agricultural managers affiliated with the Social Security for the self-employed. Mainly concerned by the retirement Madelin: Individual entrepreneurs (artisans, tradesmen) and their collaborating partners Liberal professionals and their collaborating partners The non-salaried majority managers of SARL, SELARL, The sole shareholder of EURL did not opt ​​for corporation tax Non-employee managers of a partnership, EURL (sole proprietorship), partnership, limited partnership, joint venture or de facto partnership Farmers have a specific diet. The latter is often referred to as “Madelin Agricole” because it borrows many features in the Madelin traditional retirement contract.


Madelin law retirement: regular savings and additional payments

The contributions on a Madelin contract must be regular in their amount: Their periodicity can not be greater than one year They may range from a minimum base amount to 15 times this amount Each fiscal year, the TNS can supplement its programmed contributions with additional payments up to a ceiling. It may also pay, subject to conditions, additional contributions for the years between the date of its affiliation to the mandatory old-age insurance scheme for the self-employed (Social security for the self-employed or the professional professions) and the date of its accession to the Madelin Retirement Agreement.


How to choose a retirement contract Madelin?

Madelin retirement contracts now take the form of multi-family life insurance contracts. These contracts allow the participant to diversify his savings on the financial markets, while benefiting from secure media, such as the euro fund of the insurance company. Payments net of fees are spread over the media selected by the member. There are a large number of formulas on the contract with several types of management options. In the case of retirement savings, it is advisable to choose a contract that has a sufficient number of supports to adapt the management of savings over a long period. The help of a professional is recommended. The contract must also include a transfer clause of accumulated savings to another retirement contract with another insurer.


Retirement Madelin: a tax envelope of more than 74 000 euros

Madelin pension contributions benefit from a significant deduction limit equivalent to 10% of professional income up to 8 times the annual social security ceiling (PASS) plus 15% on the fraction of this income between 1 and 8 times the PASS. A deduction floor is set up: 10% of the PASS, ie 4,052.40€ in 2019.


Payment in the form of a life annuity

According to the regulations in force in 2018, the exit from a Madelin contract must be made in the form of a life annuity. The payment of a capital at the end is excluded. The sums invested are blocked until the retirement age, except in case of force majeure. In order to recover the sums invested on his contract, the insured must make a request for the liquidation of his retirement Madelin with his insurer. Investors should favor contracts that include: Provident cover in the event of the death of the member Several life annuity options including – Reversible annuities – Step annuities – Indexed annuities – Guaranteed annuity annuities


Corporate retirement savings: what is it?


When working in a company, saving for retirement begins with the contributions that are deducted from the monthly salary for compulsory pension plans. However, in the current worrying economic, social and demographic context (lengthening of life, deterioration of the standard of living, etc.), it is more and more common to turn to other savings solutions on a personal or as part of his business. This makes it possible to set up an additional pension to compensate for the fall in the replacement rate at the time of retirement.


What is retirement savings in companies?


Retirement Savings in the Company consists of collective savings schemes allowing employees, through the company, to set up an additional retirement or to finance a future project. The amount saved over the years will be available at the time of the employee’s retirement or in the shorter term and may be withdrawn in the form of capital or annuity. On the one hand, we distinguish within the Retirement Savings in Enterprise the capitalization contracts, the Article 83 contract of the General Tax Code and the Article 39 contract of the General Tax Code.


Article 83: what is it?

The “Article 83” Retirement Savings Plans are based on the principle of capitalization. Its main features are: It is open to all companies by unilateral decision or as part of a collective agreement. Companies can choose to subscribe to this type of retirement savings for all or some of their employees. They can thus decide to benefit different objective categories of employees such as executives, non-managers, etc. In practice, “article 83” contracts mean that each employee concerned by the scheme benefits from an account dedicated to his retirement savings. On this account, the company commits to the regular payment (monthly, quarterly or annual) of contributions. The amount of these contributions depends on a rate that was set at the time of signing the contract. It may be based on the salary of the employee, according to a salary bracket … This is a defined contribution contract. The beneficiary can also make voluntary payments into his retirement savings account. The capitalized amount is definitively acquired and is paid in the form of a life annuity at the time of retirement. This is valid even if the employee leaves before retirement.


Article 39

Savings contracts falling under “Article 39” are retirement savings solutions in companies similar to “Article 83” contracts. The main differences are: The company commits to an amount or level of benefits that will be paid upon retirement; This is a defined benefit contract; The company can set up this system for a category of employees of its choice and defined according to objective criteria. These are more often senior executives; Contributions are solely the responsibility of the employer; The retirement savings will be available in the form of an annuity provided that the employee concerned ends his career within the company; The employee is exempt from taxes on contributions; The IFC contract is also part of the Retirement Savings Plan. It is a question of provisioning to an insurer the sums necessary for the mandatory payment of the end-of-career indemnities due to each employee upon his retirement; The pension can be paid to the spouse under certain conditions. “Article 83” retirement savings contracts are not subject to income tax for the employee. Provisioning this social liability externally makes it possible to benefit from a very advantageous fiscal and social framework. On the other hand, in the context of the Retirement Savings Plan, it is also possible to benefit from employee savings schemes.


What is employee savings?

Understand what saving means Employee savings allows a company to financially associate its employees with its results and (good) performance. Thanks to employee savings, employees have the opportunity to build savings in the form of securities, within their company and on a dedicated savings plan. In practice, the employee freely pays savings on this account and the company then chooses to increase the sums paid through the “matching”. The savings thus constituted make it possible to finance a project or an additional retirement. One of the advantages of employee savings is the tax and social framework that benefits both the company and the employee. Note: Employee savings plans are not available to people working in the public service or in the agricultural sector.xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

The different schemes of employee savings

The employee has the opportunity to build his savings through various schemes such as PEE (I) (Savings Plan (Inter) Enterprise) or PERCO (I) (Savings Plan (Inter-company)) for the Collective Retreat. These can help the employee build savings in the short, medium or long term.


The Company Savings Plan (PEE):

This type of plan can be set up at the initiative of the employer, either unilaterally or as part of a collective agreement. Employees have the possibility of freely paying funds on their PEE within the limit of 25% of their annual salary. The company can supplement the payments up to 8% of the PASS per employee. The amount paid can not exceed three times the employee’s contribution. The amounts paid on the PEE are “locked” for a period of 5 years minimum except in case of early releases such as a marriage, a birth, a death, a divorce, a case of over-indebtedness …


The Inter-company Savings Plan (IEP):

This system is essentially aimed at encouraging employee savings in small and medium-sized enterprises. The setting up of an Inter-company Savings Plan is subject to a collective agreement concluded within a professional branch or between several companies.


The Savings Plan for Collective Retirement (PERCO):

PERCO can be set up unilaterally by the company or as part of a collective agreement. Unlike PEE or PEI, PERCO is a long-term employee savings plan. Indeed, the funds are blocked until the retirement of the employee except in case of early releases. The employer contribution can not exceed 16% of the PASS per employee per year. His participation can not be more than 3 times greater than the employee’s contribution on his plan. At retirement, the capital may be withdrawn in the form of an annuity or capital. Note: In addition to the employee’s payments and the employer’s contribution, the PEE, the PEI and the PERCO can be powered by what is known as profit-sharing or participation. These two schemes correspond to an amount paid to employees and based on the financial performance of the company. Participation is compulsory from 50 employees and is calculated according to the results of the company and according to a legal formula. The incentive is optional and is based on objectives of profitability, performance, quality … defined by the company. Their amount may differ and be based on the salary of an employee or his seniority within the company for example. Retirement Savings in Business is therefore composed of very different devices. The choice of one or the other differs according to the objectives of the company, its targeted target or the choice of its financial contribution to its employees.