Seven years after the Pacte Act, the retirement savings plan has become an established part of the landscape without becoming the default savings choice for the French. At the same time, the list of missions entrusted to it continues to grow: financing small and medium-sized enterprises (SMEs), the energy transition, defense more recently, and now European strategic autonomy. This new ambition raises a key question: Can the PER channel more savings toward the European economy without sacrificing returns, diversification, and savers’ support?
Summary
Can we really expect everything from a single euro saved? Preparing for the retirement of the French people, financing innovation, supporting the green transition, reindustrializing the country, strengthening European sovereignty… all these expectations rest on a single savings product.
Yet the conditions are all in place: a recognized economic need, stable regulations, an attractive tax environment, and available solutions. And yet the momentum still falls short of what the demographic challenges require.
Does the PER have a product problem… or a narrative problem?
Contents
The PER: A Success in Terms of Assets Under Management for Retirement Savings, but One That Still Needs to Be Transformed
The PER has fulfilled part of its mandate: assets under management are growing, companies are adopting the system, and the product offering has been streamlined. But the driving force of the early years—the transfer of existing contracts—is losing steam. New business now relies on fresh capital, in a multi-tiered market involving digital players, bancassurance networks, and wealth management advisors.
The obstacle isn’t just a tax issue. The initial benefit primarily appeals to high-income households or self-employed individuals, while the product’s other advantages—such as spousal coverage, estate planning, and lump-sum payouts—remain largely unknown, as does the cost of starting late. And with twenty to twenty-five years of retirement ahead, the drawdown phase becomes a key consideration in product design in its own right.
When it comes to asset allocation, the shift is already underway. Group retirement savings plans and employee stock ownership programs are major sources of funding for the French and European economies. Since the passage of the Green Industry Act of 2023, unlisted securities have also been gaining ground in the default allocations of PERs, both individual and group.
However, the actual exposure still needs to be measured: these investments are often made through funds of funds—which themselves invest in multiple vehicles—or through hybrid funds, which are authorized to combine listed and unlisted assets without necessarily exceeding the specified minimum threshold. This layering of investment vehicles ultimately makes it difficult for investors to determine what portion of their savings is actually invested in unlisted assets.
Channelling Savings Toward Europe: At What Cost?
The term “sovereignty” has become firmly established in the industry’s vocabulary, but it does not mean the same thing to everyone. For some asset managers, being competitive is in itself a form of sovereignty: well-compensated savings, entrusted to European portfolio managers who seek returns wherever they may be found, strengthen the continent’s financial power. For others, sovereignty is a sliding scale—whether national, European, or regional—where each step comes at a cost in terms of both diversification and returns. For still others, sovereignty means controlling a value chain that extends beyond national borders.
The parallel with the ESG wave of 2021–2023 is on everyone’s mind: at that time, strong convictions clashed with the realities of performance and geopolitics… and some investors lost interest. The same caution applies to trendy themes, from defense to artificial intelligence, whose visibility rarely extends beyond a few years, whereas a retirement savings plan is built over thirty years.
The "Finance Europe" label, launched in June 2025, highlights these tensions: at least 70% of assets invested in the European Economic Area, a focus on equities, a five-year minimum holding period, and no capital guarantee. For funds with a predominantly European focus, this approach is natural; for international funds, the threshold is a significant constraint. For insurers, switching large contracts entirely to the label seems cumbersome, even counterproductive. Hence a more gradual approach: first highlighting the portion that is already eligible, then offering compatible investment vehicles under discretionary management, so that each investor can choose their own European exposure.
The debate also touches on investment strategies: active management advocates for a direct role in financing European companies, while index-based management points out that an index is constructed and can also be geared toward Europe. Somewhere in between, fund-of-funds management—which combines active and passive components within a single portfolio—could well offer the best of both worlds for long-term savings.
Join us for our next conference on October 14, 2026
Preparing for the retirement of the French people, financing innovation, supporting the ecological transition, reindustrializing the country, strengthening European autonomy… all of these expectations are met by a single savings product.
Does the PER have a product problem… or a messaging problem? We invite you to discuss this during a meeting organized by iQo.
Defined-contribution pensions: Persuade or Compel?
The framework, tax system, and supply are in place, yet capitalization remains a marginal supplement. As the 2027 presidential election approaches, positions span a broad spectrum.
- The most cautious people want to make it a habit to save early and regularly, with small amounts set aside by default.
- Others advocate for some degree of compulsion: a requirement for companies to provide benefits, automatic enrollment, and tax benefits redirected toward retirement.
- The most proactive advocates go so far as to want to invert the pyramid, with capitalization becoming the foundation and pay-as-you-go serving as a safety net—though there is one major objection: any such shift would require one generation to finance two systems at the same time.
One possibility is often left out of the discussion: what if the main obstacle were neither the product nor the narrative, but distribution?
Build networks, equip advisors with the right tools, and promote a message about retirement that goes beyond tax considerations. Past experience reminds us that simply making a product mandatory is not enough to generate participation.
On one point, however, experts agree: you can’t build up thirty years’ worth of savings based on rules that change every two years. Before adding new objectives to retirement savings, assessing what it already funds and ensuring the stability of the framework would already be two steps in the right direction.
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