Corporate savings plan

Simply put, an EEP is a collective savings plan offered by a company to its employees. It allows employees to set aside a portion of their earnings before taxes and social security contributions and invest that money in an investment portfolio.

The EEP may be financed by voluntary payments from the employee, as well as by contributions from the employer. In general, the employer offers a basic contribution, which can be increased by an additional contribution depending on the company’s performance.

Funds invested in an EEP can be invested in a variety of investment vehicles, such as mutual funds or company shares. Gains on these investments are not subject to income tax as long as the funds remain in the EAP.

Employees can withdraw their savings at any time, but it is generally recommended to leave them invested in the long term to maximise returns. At the end of the saving period, the funds may be recovered as capital or annuities.

In summary, an EAP is an employer-sponsored group savings plan that allows employees to set aside part of their earnings before taxes and social security contributions and invest that money in an investment portfolio. Invested funds can generate tax-free gains, and workers can reclaim their savings at any time.