More than a million people would benefit from a hat pension in France, that is to say a pension paid by their company which is added to the basic and complementary pensions from which the majority of working people benefit. This retirement hat is intended more particularly for senior executives and senior company executives and allows them to receive very substantial sums in the form of an annuity, in addition to their basic and supplementary pensions.
A hat pension designates a pension supplement financed and paid by certain companies to their senior executives and senior executives. This specific pension scheme supplements the basic and supplementary pension schemes for these employees. This is referred to as a “defined benefit” pension plan.
According to data from the Ministry of Labour, the lafinancepourtous site, an independent general interest association supported by the Banque de France, the Financial Markets Authority (AMF), the French Banking Federation (FBF) and major financial institutions , indicates that approximately 11,000 French companies are concerned by the hat pension system, most often "attached to the insurance sector, engineering, law and finance .
The amount of a hat pension is set jointly by the employer and the employee concerned when he is hired according to criteria such as his planned retirement age or the level of his remuneration at the end of his career, for example. In some cases, a hat retirement can also be conditional on the results of the company.
This particular retirement plan can take several forms. This may be a so-called "additional" scheme, which means that it is added to the retirement pensions paid by Social Security and by supplementary pension schemes, and for which the amount of the pension paid by the company represents a percentage of the last salary received by the beneficiary. This plan can also be “differential”, i.e. it provides an overall level of pension financed by the company once the pensions of the other pension plans have been deducted. It is more for the differential system that we speak of hat pensions.
A hat pension constitutes a life annuity for its beneficiary, but he only receives it if, at retirement age, he is still in the company.
If, in theory, all employees can benefit from a hat pension because the decision to implement it depends solely on the company (unilateral decision of its manager or agreement with the social partners), in reality, these are more particularly senior executives, but especially senior executives of companies who benefit from this supplementary pension plan.
This is why the notion of hat retirement is best known to the general public because of scandals linked to major business leaders such as those of TechnipFMC, Renault-Nissan, Airbus, etc., which have brought to the fore this type of specific pension plan, and especially the staggering amounts of their cap pension, yet limited to 45% of the salaries of the leaders, which can reach more than one million euros.
A company wishing to set up a hat pension system must subscribe to a group life insurance contract with defined benefits, the terms of which are specified in Article 39 of the General Tax Code. Most often, the company delegates the management of this system externally to an insurance company or a provident institute. It is this insurance contract which provides for the payment of a hat pension to some of its employees (who must adhere to this contract) and which determines its amount.
This is an insurance product financed by the company (in the form of contributions proportional to salary) the product of which is blocked and which returns to the beneficiary employee in the form of an annuity on retirement, if he is still in business.
This insurance contract intended to provide for hat pensions is advantageous for the company and the employee concerned from a tax and social point of view. For example, company payments are deductible from social contributions up to a certain ceiling, they are not subject to the general social contribution (CSG), nor to the contribution to the reimbursement of social debt (CRDS), and they are corporate tax deductible for the business. For the employee, this hat pension is subject to income tax after a 10% allowance and to social security contributions at the rate of 8.4%.
