Wednesday, June 19, 2019
Home Business Retirement age and contributions, what are we talking about?

Retirement age and contributions, what are we talking about?

These explanations concern the basic scheme and the employees of the private sector. Civil servants and special and supplementary schemes may vary in age and in the discount / surcharge systems.

► Age of legal retirement, effective, full rate, balance … What are we talking about?

The legal retirement age is set at 62 and will not move, confirmed Emmanuel Macron Thursday, April 25 at night. This is the age at which employees can apply to retire, that is, to collect their pension.

Retirement, to a legal age of 62 and a surge

But leaving at age 62 does not guarantee a full pension. If we contributed less than the number of quarters required, we would incur a haircut. This discount is final: the pension paid by the general scheme will be reduced for the rest of the life. We can choose to continue working instead of leaving, to validate the missing quarters. In all cases, from age 67 for employees after 1954, we unlock full-rate retirement. In some specific cases (mother of more than three children, handicapped worker, etc.), this full rate age can be advanced.

Attention, it is not because a pension is full rate that it is full. Some people arrive at 67 without having accumulated enough quarters. They can still leave, but the amount of the pension will then take into account the missing quarters. We are talking about the proration coefficient.

Retirement age, the bottom of the cards

In fact, the French were 62.7 years on average in 2018 according to Cnav figures. It is Effective retirement age. It continues to decline: in 2006, the average was 61 years old. Due to reforms that have lengthened the period of contribution, the French should still leave later. The government hopes that effective age will make up for the equilibrium age of the system, that is to say, the age that ensures the fiscal sustainability of the pension plan, that Jean-Paul Delevoye estimates between 63 and 64 years.

► Extend the contribution period or lower the age of departure, it is not the same?

The President of the Republic does not want to touch the legal age of departure, set at 62 years. But the number of quarters needed to reach a full-rate pension increases with age classes. Persons born in 1953 must validate at least 165 quarters, those born in 1959 must have 167 quarters, and those born in 1970 must have 171, or almost 43 years of contributions. Very schematically, if a person born in 1970 started working at age 20, they will not be able to retire at full rate before age 63. She will still be able to legally leave at age 62, but she will suffer a discount.

"Extend the reference period without moving the legal age" as Emmanuel Macron would like to return the age of departure of the French who do not want to suffer the discount. The Pension Advisory Council (COR) estimates that the effective retirement age should reach 64 years in the 2030s.

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