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French Social Security – How are we addressing this?

The last 18 months have seen a lot of discussion surrounding the French Social Security legislation; which impacts French resident crew and any crew employee who spends six months or more per annum in French territory, whilst employed to work on a non-EU flagged yacht.

The market has seen a number of new products aimed at addressing the social security obligations that arise in the above scenario, but few are ideal in terms of practical administration.

Often each crew member has to provide their own due diligence which takes time and slows the process when new crew join a yacht. Others need monthly deductions to be made from crew member salaries for both the social security and pension elements, which adds to the administrative burden and cost for the owner.

Given the aim to satisfy the social security branches of the Maritime Labour Convention, 2006 (MLC), it would be ideal if there was one single annual insurance policy that solved the problem. The thorn in the side of insurers, however, is how to satisfy the social security branch relating to “old-age benefit”.

Sarnia Yachts’ approach has been to remove that thorn and source a Euro-denominated savings and pension solution for its crew employees from Guernsey-based pension experts, BWCI Pension Trustees Limited (BWCI) (https://www.bwcigroup.com/).

BWCI specialise in trust-based savings and pension solutions and this arrangement is regulated by the Guernsey Financial Services Commission and is recognised as a pension scheme.

The old-age benefit social security branch can now be fulfilled by using this savings and pension arrangement with both employer and employee making contributions.

This is available to all crew employed by any cell of Sarnia Yachts’ dedicated crew employment company, Crew Services PCC Limited and all contributions are processed via Sarnia Yachts’ monthly payroll.

This now means the other applicable social security branches can be fulfilled by a simple annual insurance policy placed with specialist marine insurers who are familiar with the requirements that need to be covered.

The savings and pension arrangements are also suitable for:

  • Any crew employee who wishes to build up their own long-term savings ahead of retirement or just a future rainy day fund (employee voluntary contributions)
  • Any yacht owner wishing to provide savings/pension-related remuneration to some or all crew serving on a particular yacht  (employer contributions and possibly employee contributions)

BWCI’s online platform allows crew members to make their own investment choices within a select range of investment funds carrying varying degrees of risk/return profile from the money market fund to stock market-related investments. As employees of a Crew Services PCC Limited cell, due diligence is not required on the crew member to join the scheme, making it easier and quicker to set up when new crew join a yacht.

For long-standing or more senior crew who have built up substantial savings, it is possible to migrate their savings into a bespoke pension plan with BWCI which then provides them with more choices in terms of investment options and assets that their pension scheme can be invested in. This personal savings and pension arrangement can last beyond any employment connection with Sarnia Yachts.

If a crew employee is no longer employed by a cell of Crew Services PCC Limited, they may still maintain their savings and pension arrangements as a personal arrangement with BWCI, as long as certain criteria are met and necessary documentation is provided to BWCI. Alternatively, should the crew employee prefer not to continue with a personal arrangement with BWCI, they are able to withdraw the funds and use them as they wish.

Please feel free to get in contact with us if you believe our approach can be of assistance to you.