Article 39 simulator (supplementary pension): defined benefit life annuity

Estimate the annuity of an Article 39

The simulator translates a target replacement rate into a monthly annuity. Your data is neither stored nor transmitted.

Why defined benefit is a rare security

Almost all company pension plans are defined contribution plans: the contribution amount is known, but the final result depends on market performance. Article 39 does the opposite, and that's what makes it so valuable. It guarantees the result—a target annuity, for example, 20% of the final salary, paid for life. The company, not the beneficiary, bears the financial risk.

This reversal of risk makes Article 39 a rare form of security. The executive or key manager knows in advance the supplementary retirement income they will receive, regardless of market fluctuations. The company, for its part, sets aside funds for this commitment and finances it through a dedicated insurance contract, thus assuming the risk related to longevity and performance. It is a deliberate transfer of risk, designed to foster employee loyalty.

The reform stemming from the PACTE law modernized the system, making it more efficient: progressive acquisition of rights—the beneficiary accumulates their rights year after year, instead of losing everything upon retirement—performance requirements, and increased transferability. The supplementary pension has thus moved away from the "all or nothing" approach that characterized it, without losing any of its retention power.

The 3 levers that this simulator helps to frame

Lever 1: Calibrate the target replacement rate

The entire point of Article 39 lies in the promised replacement rate: 10%, 20%, or 30% of the last salary. This percentage determines both the attractiveness of the scheme for the beneficiary and its cost to the company. A rate that is too low has no effect on employee retention; a rate that is too high places a heavy burden on provisions and cash flow. Calibrating this rate is a balancing act, to be carried out with an actuary and a compensation consultant.

Lever 2: Mastering provisioning and financing

The commitment under Article 39 must be provisioned and financed through a dedicated insurance contract. The cost to the company depends on the promised annuity level, the beneficiary's age, and their life expectancy. Poorly planned financing places the burden of the commitment on the balance sheet and cash flow at the worst possible time. Structuring the financing contract—premiums, actuarial assumptions—is a technical decision with lasting consequences.

Lever 3: Securing the formalities stemming from PACTE

Since the PACTE law, the scheme has been subject to strict rules: objective categories of beneficiaries, progressive acquisition of rights, performance conditions, and social and accounting obligations. A poorly structured Article 39 risks reclassification, which would negate its tax and social benefits. Adherence to these formalities is not a mere formality; it is the very condition for the scheme's security and requires specialized support.

Case study: Bertrand, 56 years old, managing director of a family group in Bordeaux

To retain Bertrand, its key managing director, the family-owned group is implementing a 39-point severance package aimed at a replacement rate of 20% of his last gross annual salary of €120,000. Here's what the simulator shows:

The group has committed to paying Bertrand a monthly annuity of approximately €2,000 for life, in addition to his pension—equivalent to 20% of his final salary. The company bears the risk of performance and longevity, which it provisions for and finances through a dedicated insurance policy, the premiums for which are tax-deductible. For Bertrand, this is a rare form of security: a guaranteed retirement supplement, a market objective.

The lesson for a business leader: Article 39 is the ultimate weapon for retaining strategic talent because it offers beneficiaries what no contribution-based plan guarantees—a tangible result. But its power comes at a price: high cost and demanding formalities. The calibration of the contribution rate, provisioning, and compliance with the PACTE regulations determine its viability and necessitate the joint support of an advisor and an actuary.

The ultimate weapon for customer loyalty, to be wielded with a specialist

This simulator translates a target replacement rate into a monthly annuity. However, implementing an Article 39 plan is a technical exercise: calibrating the promised rate, setting aside funds and financing the commitment, and complying with the social and accounting formalities stemming from the PACTE law. If poorly structured, the plan risks being reclassified; if well-designed, it provides long-term security for the loyalty of a senior executive or key manager.

Balmont Conseil is an objective wealth management firm, a member of ANACOFI, with no capital ties to any bank or insurer. This objectivity allows us to structure the financing plan and select the most suitable financing contract from across the market, in conjunction with an actuary, solely for the benefit of the company and its management. Let's make an appointment to design your defined benefit plan.

Frequently Asked Questions

What is a "defined benefit" plan?

In a defined benefit plan like Article 39, it's the outcome—the pension amount—that's guaranteed, not the contributions. The company commits to paying a percentage of the final salary and bears the financial and longevity risks. This is the opposite of defined contribution plans (PER, Article 83), where the contribution amount is known but not the final pension, which depends on investment performance.

Who finances the supplementary pension scheme?

Article 39 is entirely employer-funded: no employee contributions are required. The company sets aside funds for the commitment and finances it through a dedicated insurance contract, the premiums for which are tax-deductible. The cost depends on the promised annuity level, the beneficiary's age, and their life expectancy. This full employer funding makes it such a valuable employee retention tool for beneficiaries.

What has the PACTE law changed for article 39?

The PACTE law overhauled the system to modernize it: progressive acquisition of rights—the beneficiary accumulates their rights year after year instead of losing everything upon retirement—performance conditions, and increased transferability. The supplementary pension has thus moved away from the "all or nothing" logic that characterized it, while retaining its power to retain talent.

For whom is a supplementary pension plan relevant?

It targets executives and strategic managers whose long-term loyalty the company wants to secure. It's a powerful tool for employee retention, guaranteeing the beneficiary a result—a lifetime annuity—that no contribution-based plan can offer. However, its cost and formalities are demanding: its implementation requires the joint support of a compensation consultant and an actuary.

What is the difference between Balmont Conseil and a bank advisor?

Balmont Conseil is a consulting firm, a member of ANACOFI, with no capital ties to any bank or insurer. We structure the financing plan, select the most suitable contract from the market, and coordinate its implementation with an actuary, solely in the best interests of the company and its management. A bank advisor or insurance agent distributes the contract through their network; we build a customized, secure, and optimized plan, with complete transparency.