So what exactly is an employee savings plan?
Little known and often overlooked, an employee savings plan is a medium-term financial savings scheme which allows the employee to make investments on favourable terms. Employees can invest in financial markets, in particular by buying shares directly in the given company and/or through a Company Investment Fund - depending on the country where the company is based. By its very nature, investing in financial markets is risky, with your investment being liable to sudden increases and decreases in value. So it is smarter not to place all your eggs in one basket.
OK, but what does it mean at Saint-Gobain?
Saint-Gobain’s employee savings plan is known as a ‘PEG’, which translates as ‘Group Savings Plan’. In operation for over 30 years, it’s now available in 46 countries. The PEG is open to any employee who has served at least 3 months at their company. Retired employees are also eligible for the scheme, subject to conditions.
Let's take Anne as an example. Anne is 31 and a digital project manager at Saint-Gobain. While Anne is technically an employee, she’s an entrepreneur at heart. What excites her is the chance to make an active contribution to the forward development of Saint-Gobain by becoming a shareholder. Investing in a PEG means Anne’s interests will be represented by a main board director.
So, what are the real benefits?
At Saint-Gobain, although the terms of investing in a PEG vary from country to country, essentially, Anne has the ability to invest up to 25% of her gross annual compensation each year. That's a lot of money. Anne has never invested that much, though she's tempted every time the opportunity to invest comes ‘round. After all, a 20% discount on Group shares is a pretty good deal! What’s more, Saint-Gobain can top up Anne's investments with an additional contribution (the contribution amount can also vary from country to country). And the icing on the cake is that Saint-Gobain covers all the account management charges. Anne also benefits from 100% of any dividends paid while she remains an investor.
But when and how can you release your cash?
Your cash can be withdrawn in full at maturity. But what if something unexpected crops up in life? Well, you simply release your investment early - penalty-free (terms and conditions apply)(1) That swings the argument for Anne, who wants immediate availability of funds, because she has some exciting personal plans in the medium term... But they’re still under wraps right now...
(1) at Saint-Gobain, these conditions include home purchase, home improvements, marriage or civil partnership, birth or adoption, divorce or separation, termination of employment contract, employee disability, business startup or takeover, over-indebtedness and death of the employee or spouse, but again conditions vary from country to country