In short…
Every company must pay an end-of-career indemnity (IFC, indemnité de fin de carrière) to its employees retiring, set by the Labour Code or the collective agreement in months of salary according to length of service. This social commitment, often ignored, can represent significant sums that fall all at once when departures occur and weigh on cash. An IFC contract lets you outsource and smooth this charge: the company pays regular premiums, deductible from its profit, and the insurer takes over the indemnity when the time comes.
- Legal obligation — the IFC is owed on every retirement departure
- Commitment to provision — on the balance sheet, often underestimated by owners
- IFC contract — deductible premiums and a future charge that is secured and smoothed
Estimate your IFC commitment
The simulator estimates the indemnity per employee and the total commitment according to length of service. Your data is neither stored nor transmitted.
End-of-career indemnities (IFC) simulator
Estimate the retirement-departure indemnity owed to your employees and the social commitment to provision.
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 IFC is the balance sheet’s hidden debt
The retirement-departure indemnity is not an option: it is an obligation. Set by the Labour Code or, more generously, by the collective agreement, it is expressed in months of salary according to the employee’s length of service. For a loyal staff member, it can reach several months of pay. Multiplied by all the departures to come, it constitutes a significant social commitment that accounting standards require to be disclosed.
The problem is not so much the amount as its nature: it is a deferred charge, invisible in the current income statement, that materialises only when departures occur. Many owners discover its scale late, when several long-serving staff leave in a tight window and the indemnity falls all at once, hitting cash at the worst moment.
It is precisely this mechanic — a real but deferred commitment, underestimated because invisible — that justifies dealing with it upstream. Ignoring the IFC does not make it disappear; it accumulates silently on the balance sheet and reminds the owner of itself the day they can least absorb it. Provisioning and funding it progressively turns a charge suffered into a charge mastered.
The 3 levers this simulator highlights
Lever 1 — quantify the commitment before it falls due
The first step is to measure the real scale of the commitment: the indemnity per employee according to length of service and the collective agreement, projected onto the company’s age pyramid. Many owners have never done this calculation and discover, when it is put to them, sums running into tens or even hundreds of thousands of euros. Putting a figure on the hidden debt is the condition of any rational provisioning decision.
Lever 2 — smooth and deduct via an IFC contract
Taking out an IFC contract with an insurer lets you provision the charge progressively: the company pays regular premiums, deductible from its taxable profit, and the insurer takes over the indemnity payment when the time comes. The charge is smoothed across several years instead of falling all at once, secured, and taken off the balance sheet. It is the opposite of the “we’ll see when the time comes” logic, which exposes cash to the shock of departures.
Lever 3 — size the contract on realistic assumptions
The efficiency of an IFC contract depends on its sizing: the population covered, the assumptions on length of service, turnover and departure dates. An undersized contract leaves part of the commitment unfunded; oversized, it needlessly ties up cash. The calibration, based on realistic assumptions, is conducted with an advisor alongside the accountant — that is where the scheme’s real relevance is decided.
Worked example — Catherine, 58, owner of a 40-employee industrial firm in Clermont-Ferrand
Catherine has never quantified her IFC commitment. Her company has 5 employees close to retirement, on an average gross monthly salary of €3,000, with an average length of service of 25 years. Here is what the simulator reveals.
| Criterion | Per employee concerned | For the 5 employees | Without IFC contract |
|---|---|---|---|
| Average length of service at departure | ≈ 25 yrs | — | — |
| Estimated indemnity per employee | ≈ €15,000 | — | unprovisioned charge |
| Total commitment to fund | — | ≈ €75,000 | falls when departures occur |
| Treatment with an IFC contract | smoothed premiums | deductible from profit | secured charge |
Illustrative example — figures simplified for clarity and not contractual.
By running the calculation, Catherine discovers a commitment of around €75,000 concentrated on five tightly spaced departures — a charge that, without anticipation, would hit her cash all at once. By taking out an IFC contract, she smooths this charge across several years through premiums deductible from her profit, and the insurer takes over when the time comes. The hidden debt becomes a mastered charge, taken off the balance sheet.
The lesson for any owner: the IFC does not disappear because it is ignored; it accumulates and reminds you of itself at the worst moment. Quantifying the commitment, then provisioning it via a contract sized on realistic assumptions, turns a charge suffered into one anticipated and deductible. It is a reflex of sound management, too often postponed for want of having run the calculation.
A very real deferred charge
The retirement-departure indemnity is set by the Labour Code or the collective agreement, in months of salary according to length of service. For a long-serving employee, it can reach several months of pay. Multiplied by the departures to come, it constitutes a significant social commitment that accounting standards require to be disclosed.
Many owners discover the scale of this charge late, when it falls all at once at the time of departures and weighs on cash.
The value of an IFC contract
Taking out an IFC contract with an insurer lets you provision this charge progressively: the company pays regular premiums, deductible from its taxable profit, and the insurer takes over the indemnity payment when the time comes. The charge is smoothed, secured, and taken off the balance sheet.
Sizing the contract (population covered, assumptions on length of service and turnover) is calibrated with an advisor, alongside the accountant.
A debt you choose to master, or one that imposes itself
This simulator estimates the indemnity per employee and the total commitment according to length of service. But the decision is taken upstream: should you provision via an IFC contract, and how should you size it — population covered, assumptions on length of service and turnover? Well calibrated, the contract smooths an unavoidable charge, makes it deductible and takes it off the balance sheet; ignored, the commitment hits cash at the time of departures.
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 size the IFC contract and select it across the whole market, alongside your accountant, in the service of your company alone. Run your projection above, then book a call to quantify your commitment and secure this charge.
Frequently asked questions
Is the end-of-career indemnity compulsory?
Yes. The retirement-departure indemnity is owed by the company to every employee retiring. It is set by the Labour Code or, most often more generously, by the applicable collective agreement, in months of salary according to length of service. For a long-serving employee, it can reach several months of pay.
Why is it called a commitment to provision?
Because the IFC is a deferred charge, certain in principle but future in its realisation. Accounting standards require this social commitment to be disclosed. Many owners underestimate it because it does not appear in the current income statement: it accumulates silently and materialises only at the time of departures, often several at once.
How does an IFC contract work?
The company takes out a contract with an insurer and pays regular premiums, deductible from its taxable profit. The insurer takes over the indemnity payment when the time comes. The charge, instead of falling all at once at the time of departures, is thus smoothed across several years, secured and taken off the balance sheet. It is the opposite of the “we’ll see when the time comes” logic.
How do you size an IFC contract correctly?
The sizing rests on the population covered and the assumptions on length of service, turnover and departure dates. An undersized contract leaves part of the commitment unfunded; oversized, it needlessly ties up cash. The calibration, based on realistic assumptions, is conducted with an advisor alongside the accountant — that is where the scheme’s relevance is decided.
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.