This is the explosive project of this beginning of the year, against which the unions, all united, are already planning to demonstrate. On Tuesday January 10, after long weeks of discussions with the social partners and representatives of political groups, Prime Minister Elisabeth Borne will officially present the pension reform. Contributions, pensions, Touraine reform or minimum pension: the terms of the debate are sometimes technical. The Express takes stock to see more clearly.
This is the heart of the question of pensions. This is the sum deducted each month from the salary of active workers to finance the pensions of those who have already taken them. This system, known as “distribution”, is historic in France, and is opposed to a capitalization system, where individuals accumulate, via their contributions, capital for their own retirement.
In addition to the contributions paid to pension funds, an employee can only retire if they have reached the minimum age and have contributed enough quarters. In France, the legal retirement age is currently 62 years old. Regarding the minimum insurance period required to have a full pension, it varies between 160 and 172 quarters, depending on the year of birth of the asset in question.
An employee who decides to retire without having validated enough quarters is subject to a discount. For a private employee, a full-rate pension is equivalent to 50% of the average gross annual salary. For each missing validated quarter, this rate is reduced by 1.25%.
Conversely, the premium corresponds to an increase in the basic retirement pension. It applies when the insured continues his activity beyond the period of insurance required to benefit from the full rate and after the legal retirement age.
The age of the automatic full rate is the minimum age to obtain the basic retirement pension without reduction, regardless of the number of quarters acquired. This age is set at 67 years.
This is the income intended for people who have reached retirement age. The basic pension refers to the main retirement pension received by any person who has exercised a professional activity; it is paid by Social Security. The supplementary pension is defined by Argirc-Arrco. If she is also compulsory, it is added to the basic pension.
Named after Marisol Touraine, the Minister of Social Affairs who implemented it under the Hollande five-year term, this reform came into force in 2020. Intended to maintain the pay-as-you-go pension system and rebalance it by 2040 , it provides for the extension of the contribution period by one quarter every three years, to reach 43 years (172 quarters) for persons born in 1973 or later.
According to initial information, the government plans to accelerate this reform, by increasing the minimum contribution period by one quarter every two years, or even every year. With this measure, the executive would seek to reduce the cost of the pension system which represents, in 2020, an expenditure of 332 billion euros, or 14.4% of GDP, according to the Drees.
In addition to accelerating the Touraine reform, the government has planned to shift the legal retirement age to 64 or 65 years. In return, a new floor for pensions would be introduced, to go from 75% of the minimum wage today to 85%, or around 1,200 euros per month. There remains the question of whether this minimum pension will only concern new retirees or those who have already asserted their rights.
