In short…
The “Article 39”, or top-hat pension (retraite chapeau), is a defined-benefit scheme: the company commits to a level of annuity — a percentage of the final salary — for the benefit of managers or key executives. Unlike defined-contribution schemes, it is the outcome that is guaranteed, not the contribution: the company bears the financial risk and provisions the commitment. Entirely employer-funded and overhauled by the PACTE law, it is one of the most powerful tools for retaining strategic talent — and one of the most technical to set up.
- Guaranteed life annuity — expressed as a percentage of the final salary
- Full employer funding — deductible from the company’s profit
- Talent retention — managers and strategic executives, with progressive vesting of rights
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.
Article 39 (top-hat pension) simulator
A defined-benefit scheme: estimate the target life annuity, funded by the company.
Results are provided for purely illustrative and educational purposes, based on the parameters you enter and simplified assumptions (2026 taxation, constant return, excluding inflation). They constitute neither personalised investment advice, nor tax advice, nor an offer to subscribe. Some investments carry a risk of capital loss. Before any decision, speak with an advisor.
Why the defined benefit is a rare security
Almost all company-retirement schemes are defined-contribution: you know the contribution paid in, but the final outcome depends on market performance. Article 39 does the opposite, and that is what makes it precious. It guarantees the outcome — a target annuity, for instance 20% of the final salary, paid for life. It is the company, not the beneficiary, that bears the financial risk.
This inversion of the risk makes Article 39 a rare security. The manager or key executive knows in advance the retirement top-up they will receive, independent of market swings. The company, for its part, provisions the commitment and funds it via a dedicated insurance contract, bearing the longevity and performance risk. It is an assumed transfer of risk, in the service of retention.
The PACTE reform framed the scheme to modernise it: progressive vesting of rights — the beneficiary accrues their rights year after year, instead of losing everything on departure —, performance conditions, greater transferability. The top-hat pension thus left behind the “all or nothing” logic that characterised it, without losing any of its retention power.
The 3 levers this simulator helps to frame
Lever 1 — calibrate the target replacement rate
The whole stake of Article 39 lies in the replacement rate promised: 10%, 20%, 30% of the final salary. This percentage determines both the scheme’s appeal to the beneficiary and its cost to the company. A rate too low has no retaining effect; a rate too high weighs heavily on provisions and cash. The calibration is a balancing exercise, to conduct with an actuary and a remuneration advisor.
Lever 2 — master the provisioning and funding
The Article 39 commitment must be provisioned and funded via a dedicated insurance contract. The cost to the company depends on the level of annuity promised, the beneficiary’s age and their life expectancy. Poorly anticipated funding lets the commitment weigh on the balance sheet and the cash at the worst moment. Structuring the funding contract — premiums, actuarial assumptions — is a technical decision with lasting consequences.
Lever 3 — secure the PACTE-era formalities
Since the PACTE law, the scheme obeys strict rules: an objective category of beneficiaries, progressive vesting of rights, performance conditions, social and accounting obligations. A badly structured Article 39 exposes itself to a reclassification that would ruin its tax and social benefit. Observing these formalities is no formality: it is the very condition of the scheme’s security, and it demands specialist support.
Worked example — Bertrand, 56, managing director of a family group in Bordeaux
To retain Bertrand, its key managing director, the family group sets up an Article 39 targeting a replacement rate of 20% of his final gross annual salary of €120,000. Here is what the simulator translates.
| Criterion | Assumption used | Translation | For the company |
|---|---|---|---|
| Final gross annual salary | ≈ €120,000 | calculation base | — |
| Target replacement rate | 20% | ≈ €24,000/yr annuity | commitment to provision |
| Estimated monthly life annuity | — | ≈ €2,000/month for life | borne by the company |
| Funding | dedicated insurance contract | premiums deductible from profit | smoothed charge |
Illustrative example — figures simplified for clarity and not contractual.
The group commits to paying Bertrand an annuity of around €2,000 a month, for life, on top of his retirement — i.e. 20% of his final salary. It is the company that bears the performance and longevity risk, which it provisions and funds via a dedicated insurance contract whose premiums are deductible from its profit. For Bertrand, it is a rare security: a guaranteed retirement top-up, independent of the markets.
The lesson for a company owner: Article 39 is the heavy weapon for retaining strategic talent, because it offers the beneficiary what no contribution-based scheme guarantees — an outcome. But its power has a flip side: a demanding cost and formalities. Calibrating the rate, the provisioning and respecting the PACTE rules condition its viability, and require the joint support of an advisor and an actuary.
The principle of the defined benefit
Unlike defined-contribution schemes (where you know the contribution but not the outcome), Article 39 guarantees the outcome: a target annuity, for example 20% of the final salary, paid for life. It is the company that bears the financial risk and provisions the commitment. For the beneficiary, it is a rare security.
The PACTE reform framed the scheme (progressive vesting of rights, performance conditions) to make it more transferable and less “all or nothing” than before.
For whom, and at what cost
The top-hat pension targets managers and executives whose loyalty the company wants to secure for the long term. Its cost to the company depends on the level of annuity promised, the beneficiary’s age and life expectancy; it is provisioned and funded via a dedicated insurance contract.
Setting it up is technical (objective category, social and accounting obligations) and deserves the joint support of a remuneration advisor and an actuary.
The heavy weapon of retention, to be handled with a specialist
This simulator translates a target replacement rate into a monthly annuity. But setting up an Article 39 is a technical exercise: calibrating the rate promised, provisioning and funding the commitment, observing the social and accounting formalities of the PACTE law. Badly structured, the scheme exposes itself to reclassification; well built, it secures the long-term loyalty of a manager or key executive.
Balmont Conseil is an independent wealth-management firm, a member of ANACOFI, with no capital ties to a bank or an insurer. This independence lets us structure the scheme and select the funding contract across the whole market, alongside an actuary, in the service of the company and its manager alone. Run your projection above, then book a call to design your defined-benefit scheme.
Frequently asked questions
What is a “defined-benefit” scheme?
In a defined-benefit scheme such as Article 39, it is the outcome — the level of the annuity — that is guaranteed, not the contribution. The company commits to paying a percentage of the final salary and bears the financial and longevity risk. It is the opposite of defined-contribution schemes (PER, Article 83), where you know the contribution but not the final annuity, which depends on investment performance.
Who funds the top-hat pension?
Article 39 is entirely employer-funded: no employee contribution. The company provisions the commitment and funds it via a dedicated insurance contract whose premiums are deductible from its profit. The cost depends on the level of annuity promised, the beneficiary’s age and their life expectancy. It is this full employer funding that makes it a retention tool so valued by beneficiaries.
What did the PACTE law change for Article 39?
The PACTE law overhauled the scheme to modernise it: progressive vesting of rights — the beneficiary accrues their rights year after year instead of losing everything on departure —, performance conditions, greater transferability. The top-hat pension thus left behind the “all or nothing” logic that characterised it, while keeping its talent-retention power.
Who is the top-hat pension relevant for?
It targets managers and strategic executives whose loyalty the company wants to secure for the long term. It is the heavy weapon of retention, because it guarantees the beneficiary an outcome — an annuity for life — that no contribution-based scheme can promise. In return, its cost and formalities are demanding: setting it up deserves the joint support of a remuneration advisor and an actuary.
Results are provided for purely illustrative and educational purposes, based on the parameters you enter and simplified assumptions (2026 taxation, constant return, excluding inflation). They constitute neither personalised investment advice, nor tax advice, nor an offer to subscribe. Some investments carry a risk of capital loss. Before any decision, speak with an advisor.