Thursday, 19 Apr 2018

Public service pensions: a calculation method that generates huge gaps

ECO SCAN – According to a study by iFRAP, public service retirees can expect very different treatments, for similar incomes during the period of activity. In question, the use of bonuses in the pay of civil servants: the State lists some 1851 allowances distributed in all public services.
The inequalities of treatment between private sector employees and State civil servants were known to be the subject of much debate and tension. But within public administrations, there may also be large disparities when the time comes for retirement. In order to appreciate the extent of these differences in treatment and the implication of the bonuses in the calculations, the iFRAP Foundation compared the situation of 1358 people born in 1958 and having a full career in the state civil service, with no discount or premium. *. The purpose of this compilation of individual cases with different status and income is also to bring out an average replacement rate for public servants, that is, the ratio between the last activity income and the retirement income. Replacement rates ranging from 51% to 75% of last salary First observation: it is not a question of minimal variations corresponding to specific regimes, but of true disparities. The replacement rate calculated by iFRAP on these 1358 cases ranges between 51% and 75% of the last salary, the latter being the maximum legal percentage contemplated by the public service pension plan. For example, Edmond, a category B employee, receives, for example, a total gross salary of 3645 euros per month, and his retirement will be 2092 euros, a replacement rate of 57.4%. Noémie, paid slightly less with 3250 euros gross, will nevertheless receive 2193 euros in retirement, or 101 euros more than Edmond … Education staff, not affected by premiums, are the most advantaged at the time of retirement . Thus Françoise, a certified teacher category A, receives a total gross salary of 4815 euros, of which only 4.8% of premiums: it will therefore retire 72% of its income official, or 3458 euros. A simple reason for this: for civil servants, bonuses are not included in the basic calculation of retirement. Only the additional retirement of the public service, the RAFP is calculated taking into account various bonuses and allowances, within the limit of 20% of the index treatment. Thus, Edmond’s salary is made up of 24.7% of premiums, while that of Noémie is only 10%. When calculating the base, Noémie is thus favored by her gross income excluding premiums. Unlike the private sector, the entire public “compensation scheme” is not taken into account because premiums are not subject to any charge. When 1000 euros of bonuses are paid, the civil servant pays them in full, while the employee of the private sector receives only about 730 euros, the charges taken contribute to retirement.

The average replacement rate calculated by iFRAP is still 66% of total gross salary, including bonuses. It remains higher than the private sector rate , where pensions are even more variable because of the many regimes and less linear professional careers. A gap mainly due to the definition of the base of calculation: last six months of activity for civil servants (period often ostentatious, with a “coup de chapeau” on the part of the employer to boost retirement), average of 25 best years at the ceiling of Social Security for private employees. »READ ALSO – Civil service: beginning of concertation under pressure on the social dialogue »READ ALSO – Retreats: what if we tried the single point scheme? The 1851 bonuses of the state civil service, harm to civil servants? According to the public service information website, bonuses are “related to the constraints, risks or technicalities of their duties, others to their level of responsibility or their commitment to work “, that is, their performance . Many premiums have historic roots, such as the “sewer premium” levied by members of the Council of State, dating back to the time when they were responsible for controlling sanitation. These bonuses are an increasingly important part of the salary. What to say the heating premium for Senate employees (now suppressed for new entrants) but whose amount was around 4000 euros per year? According to Agnès Verdier-Molinié, Director of the iFRAP Foundation, the share of bonuses in the overall remuneration of civil servants exceeded 28% in 2015 , some departments are known for their immoderate use of the premium, relatively simple to implement and to easily improve the treatment of their teams. Thus in Bercy, a public finance controller can improve his salary by 41%, an inspector can reach up to 51% more than the normal plan. The increase turns to the jackpot if by chance the official is attached to one of these “generous” ministries.

But besides the weakening of the retirement, this system, often organized in opacity, poses real management problems for the services of the State. In order to attract and retain the right elements, the management sometimes runs the premium race, to the detriment of a real global human resources policy that would send executives and employees to positions that suit them best, for their professional career, cohesion profiles and efficiency of public services. Depending on the assignments, excessively disparate bonuses from one direction to another may distort the choice of public servants, avoiding positions of strategic importance and favoring others with better bonuses but less interest. As Agnès Verdier-Molinié points out, ” these premiums are a major obstacle to the modernization of the public service “. Similarly, Luc Rouban, research director at CNRS and Sciences Po, explained in February at Figaro that “increasing the share of the flexible can create tensions in the services”, while underlining a possible drift: “the real fundamental problem, which is raised by the unions, is that of a possible favoritism in the attribution of the premiums “. »READ ALSO – Officials: new day of mobilization on May 22 * To estimate the pension amount of paid-up capital by the Civil Servants Additional Retirement (RAFP), life expectancy in retirement has been standardized at 21.44 years for men and 26.1 years for women.

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