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Article 39 simulator (supplementary pension): defined benefit life annuity
The "Article 39" plan, or supplementary pension, is a defined benefit scheme: the company commits to a level of pension — a percentage of final salary — for senior executives or key managers. Unlike defined contribution schemes, it is the outcome that is guaranteed, not the contribution: the company bears the financial risk and makes provision for the commitment.
Expressed as a percentage of the last salary
Deductible from the company's profit
Senior executives and key managers, with gradual vesting of rights
The simulator
Estimate the pension from an Article 39 plan
The simulator translates a target replacement rate into a monthly annuity. Your data is neither stored nor transmitted.
Article 39 simulator — supplementary pension
Defined benefit plan: estimate the target lifetime annuity, funded by the company.
Indicative calculation, based on 2026 rules and the assumptions entered above.
Why
Why defined benefit is a rare form of security
Almost all company pension schemes are defined contribution: you know the contribution paid in, but the final result depends on market performance. Article 39 does the opposite, and that is what makes it valuable. It guarantees the result — a target pension, for example 20% of 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 business owner or key executive knows in advance the supplementary pension they will receive, regardless of market swings. The company, for its part, makes a provision for the commitment and funds it through a dedicated insurance contract, bearing the longevity and performance risk. It is a deliberate transfer of risk, in the service of retention.
The reform under the PACTE Act brought the scheme up to date: gradual vesting of rights — the beneficiary builds up rights year after year, instead of losing everything on leaving the company — performance conditions and greater portability. The supplementary pension has thus left behind the "all or nothing" logic that defined it, without losing any of its retention power.
What the calculation shows
The 3 levers this simulator helps you frame
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.
The Article 39 commitment must be provisioned and funded through a dedicated insurance contract. The cost to the company depends on the promised pension level, the beneficiary's age and their life expectancy. Poorly anticipated funding puts the burden of the commitment on the balance sheet and cash flow at the worst possible moment. Structuring the funding contract — premiums, actuarial assumptions — is a technical decision with lasting consequences.
Since the PACTE Act, the scheme has been subject to strict rules: an objective category of beneficiaries, gradual vesting of rights, performance conditions, social security and accounting obligations. A poorly structured Article 39 plan is exposed to reclassification, which would wipe out its tax and social security benefits. Complying with these formal requirements is not a mere formality: it is the very condition of the scheme's security, and it calls for specialist support.
Case study
Case study: Bertrand, 56 years old, managing director of a family group in Bordeaux
To retain Bertrand, its key managing director, the family group sets up an Article 39 plan targeting a replacement rate of 20% of his final gross annual salary of €120,000. Here is what the simulator shows:
| Indicator | Assumption used | What it means | For the company |
|---|---|---|---|
| Last gross annual salary | ≈ €120,000 | calculation basis | — |
| Target replacement rate | 20% | ≈ €24,000/year pension | commitment to be provisioned |
| Estimated monthly life annuity | — | ≈ €2,000/month for life | borne by the company |
| Financing | dedicated insurance contract | premiums deductible from profit | cost spread over time |
The group undertakes to pay Bertrand a pension of about €2,000 a month, for life, on top of his retirement income — 20% of his final salary. The company bears the performance and longevity risk, which it provisions and funds through a dedicated insurance contract whose premiums are deductible from its profit. For Bertrand, it is a rare form of security: a guaranteed retirement top-up, unaffected by the markets.
The lesson for a business owner: Article 39 is the heavy artillery of strategic talent retention, because it gives the beneficiary what no contribution-based scheme guarantees — a result. But its power has a downside: demanding cost and formal requirements. Calibrating the rate, provisioning and complying with the PACTE rules determine its viability, and call for the joint support of an adviser and an actuary.
In practice
The heavy artillery of retention, to be handled with a specialist
This simulator turns a target replacement rate into a monthly pension. But setting up an Article 39 plan is a technical exercise: calibrating the promised rate, provisioning and funding the commitment, and complying with the social security and accounting formalities stemming from the PACTE Act. Poorly structured, the scheme is exposed to reclassification; well built, it secures the loyalty of an executive or key manager for the long term.
Balmont Conseil is a wealth management advisory firm based in Lyon, a member of ANACOFI-CIF, with no capital ties to any bank or insurer. Open architecture allows us to structure the scheme and select the funding contract from among our partners, working with an actuary, in the service of the company and its business owner. Let's book an appointment to design your defined benefit plan.
Frequently asked questions
What clients ask us.
What is a "defined benefit" plan?
In a defined benefit plan such as Article 39, it is the result — the level of the pension — that is guaranteed, not the contribution. The company commits to paying a percentage of final salary and bears the financial and longevity risk. It is the opposite of defined contribution plans (PER, Article 83 plan), where you know the contribution but not the final pension, which depends on investment performance.
Who finances the supplementary pension scheme?
Article 39 is entirely funded by the employer: there is no employee contribution. The company provisions the commitment and funds it through a dedicated insurance contract, whose premiums are deductible from its profit. The cost depends on the promised pension level, the beneficiary's age and their life expectancy. This full employer funding is what makes it a retention tool so highly valued by beneficiaries.
What did the PACTE Act change for Article 39?
The PACTE Act overhauled the scheme to bring it up to date: gradual vesting of rights — the beneficiary builds up rights year after year instead of losing everything on leaving the company — performance conditions and greater portability. The supplementary pension has thus left behind the "all or nothing" logic that defined it, while keeping its power to retain talent.
For whom is a supplementary pension plan relevant?
It is aimed at senior executives and key managers whose loyalty the company wants to secure for the long term. It is the heavy artillery of retention, because it guarantees the beneficiary a result — a lifetime pension — that no contribution-based scheme can promise. In return, its cost and formal requirements are demanding: setting it up warrants the joint support of a remuneration consultant and an actuary.
What is the difference between Balmont Conseil and a bank adviser?
Balmont Conseil is a wealth management advisory firm, a member of ANACOFI-CIF, with no capital ties to any bank or insurer. We structure the scheme, select the funding contract from among our partners and coordinate its implementation with an actuary, in the interest of the company and its business owner. A bank adviser or insurance agent distributes their network's contract; we build a tailor-made scheme.
