Higher average pension for old than new withdrawals. Purchasing power eroded. Retirement savings still timid. Before the summer and the approach of the entry into force of the pension reform on September 1, 2023, the DREES and the Pensions Orientation Council published a wealth of information. MoneyVox selects 5 telling figures for you on the amount of the pensions.
In Net monthlythe 17million French withdrawals currently affect 1420 euros, all inclusive, basic and supplementary pensions, according to the annual study by the DREES, published in mid-June. Inevitably, this average hides huge disparities, depending on your former profession or your geographical area. But beyond the overall average, these very dense reports point to very telling data (which does not necessarily encourage optimism) on your future retirements.
How much are withdrawals (on average) in your department?
1398 euros, average pension of those who stop working today
Here is another average: At the end of 2021, the average gross pension (including possible pension increase for 3 children) of first-time liquidators residing in France amounts to 1516 euros gross, i.e. 1398 euros net of social contributions, we read in the Drees report. First-time liquidators? Those who have just liquidated their rights retirement.
The comparison is obvious: yes the average pension of new retirees is lower than that of all retirees, so with all the old ones. And that wasn’t true 20 years ago. The inversion of the balance of power between old and new retirees took place during the departures of the year 2009.
|Retirement year||First-time liquidators|
(old and new)
Average gross monthly amounts of the direct entitlement pension, in constant 2021 euros
The DREES qualifies however… without questioning this clear evolution of the gap between pensions of new and old retirees: . Indeed, a non-negligible proportion of them will liquidate another direct right in at least one other plan.
6.8%, the decline in purchasing power of a withdrawal since 1997
Pensions, basic and supplementary, are revalued each year, on the basis of a formula that indirectly follows inflation. Since the calculation formulas are rarely favorable to the purchasing power of withdrawals, the increases lose ground on inflation, as shown in the following graph taken from the DREES report.
|Adjustments by pension plan|
|Basic schemes (Cnav, etc.)||5.1%|
1.1% + 4% (in two stages)
|RSI merchants (complementary)||5.1%||0.6%|
|RSI artisans (complementary)||5.1%||0.6%|
Source: Drees, report Pensions and withdrawals 2023
Result, still according to the DREES: The purchasing power of the gross retirement pension of a non-managerial employee in the private sector with a continuous career who paid his full pension at age 60 in 1997 fell by 6.1% in total between end of 1997 and end of 2022. The purchasing power of his net pension fell by 6.8%.
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2260 euros, per year, the pension supplement thanks to the annuity of the retirement savings plans
Retirement savings plans (PER), individual or collective, and their predecessors Perp, article 83 or Madelin contracts, are developing and allow savings to be made by reducing taxes during working life… to recover life annuity or ( much more recent option) in capital at retirement age.
2.4 million withdrawals receive an annuity from a supplementary pension contract, especially not to be confused with complementary schemes, for 2.6 million beneficiaries in total by adding capital outflows. Which remains very low compared to the 17 million withdrawals in France.
And the annual bonus remains relatively low: 2260euros per year, or just over 188euros per month. An amount that falls to 1730euros per year for individual plans.
1 new withdrawal out of 4 does not know the full rate
The full rate, the discount, the premium, progressive retirement, minimum contributory… do you know what it is or have you never heard of it? The Research, Studies, Evaluation and Statistics Department (DREES) asked the question to 5,500 people in 2021 (1)half of which are withdrawals.
The 2023 pension reform may have changed the answers… but the finding remains a general lack of knowledge of retirement among the population. A quarter of the people questioned do not know or do not understand the principle of the full rate, which allows you to have a pension without a discount… A full rate which requires you to contribute enough quarters and often forces you to work beyond the legal age. Only a third is aware of progressive retirement, only 20% of the population is aware of the principle of minimum retirement for the basic scheme (minimum contributory or guaranteed).
Pension reform: basic pension, full rate, premium… 10 words to understand what the law is changing
Two times fewer beneficiaries of the minimum pension in 10 years
THE contributory minimum (MiCo)? As of January 1, 2023, its amount is €684.13 per month for a full career in the scheme (747.57 euros with the increase). It is this small pension scheme that will be reboosted on the occasion of the pension reform, with a bonus of a maximum of 100 euros if you tick all the conditions. The concept of MiCo, which concerns only the basic pension, so largely unknown (see above), this partly explains the misunderstanding of the critical and deciphered promise – of the 1200 euro pension.
There remains one quantified observation: since 2012 and the change in MiCo eligibility (including all pensions and limitation of the MiCo if the sum reaches 1323 euros) the number of beneficiaries has fallen by around 45% to less than 20% of new withdrawals each year. The DREES specifies, however, that the complex calculation and the deadline for granting the MiCo partly explains this statistical drop, with certain retirees obtaining this minimum pension later.
A final figure on the minimum pension, output of the report to the Pensions Guidance Council (COR), unveiled in June: has the objective of a gross pension equal to 85% of the net minimum wage been achieved? Yes for the 1963 generation affected by the MiCo: the gross pension boosted by the MiCo will rise to 86.4% of the net minimum wage and will remain above 85% until the 1975 generation according to COR projections. After… 83% of the minimum wage if the calculation formulas remain as they are for those born during the 1980s.
Pension reform: what changes for small pensions from September 1