Buying back quarters to improve your retirement remains a costly operation, Actualité/Analyse Epargne

To increase the pension of your basic retirement when you do not have a sufficient insurance period (early departure in particular), it is still possible to buy back quarters of contributions. Only certain situations allow it: this is the retirement payment mechanism (VPLR) for years of higher education or calendar years worked but validated by less than four quarters. The years worked abroad in a non-contracted country also allow you to benefit from this buy-back option.

Understand the two possible options

Redemptions are limited to a maximum of 12 quarters. The redemption amount for each quarter is set according to the insured’s remuneration and age. Two options are available: the redemption of quarters can be done “under the rate” or “under the rate and duration of insurance”.

  • With the option “in respect of the rate” alone, the least expensive, the redeemed quarters only make it possible to reduce the discount rate which applies to the average annual income to calculate the retirement pension.
  • With the option “in respect of the rate and duration of insurance”, the quarters bought back make it possible to improve both the discount rate and the ratio of duration of insurance to duration of insurance required. This report in fact reduces the pension when the total number of quarters required for a full pension is not available.

Today, 167 quarters are indeed requested for people close to the legal retirement age (born between 1958 and 1960) while 172 are requested for insured persons born from 1973.

No change to the 2022 grid

The grid of redemptions of quarters of pension contributions published each year by the National Old Age Insurance Fund (Cnav), has not changed this year. The same conditions as last year therefore apply to requests submitted since January 1, 2022. This scale applies to policyholders aged 20 to 67. From the age of 67 and over, the amount of the redemption contributions is determined on the basis of the amount provided for insured persons aged 62 and reduced by 2.5% per completed year beyond this age (62 years), without time limit.

You will have understood by seeing this scale, the purchase of quarters is expensive and not necessarily interesting, especially since the next pension reform should upset the current system. As Valérie Batigne, president of Sapiendo Retraite, pointed out in a recent column, ” it is a costly operation whose profitability must be well studied before launching “.

Example in numbers

In the example of a 59-year-old person with annual income of €30,000 who is missing 6 quarters, buying back 4 will cost him €12,880 with the rate option only and €19,088 for the rate and duration insurance. According to our calculations, in the first case where you have to invest €12,880, your retirement pension will be improved by only €60 per month, going from around €1,115 per month to €1,175 per month. This amounts to saying that it will take many years to recoup this investment (nearly 18 years at first sight).

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