Pension reform and pivotal age at 64, News / Actu Epargne

Editorial – Until now, retirement and the calculation of the retirement pension were calculated based on two factors: the legal retirement age (or that of the automatic full rate) and the number of validated quarters. However, with the new reform in the pipeline, it may well be that these notions are deleted in favor of a pivotal age. To enlighten you on the subject, we answer all your questions in this article.

What is the pivotal age?

To put it simply, the pivotal age is the age at which the discount is canceled on your retirement pension. It would therefore replace the current age of the full rate. In 2022, it would be set at 62 years and 4 months and would gradually increase until reaching 64 years of age by 2027. As a reminder, the age of the current full rate is set at 67 years. According to the pension reform envisaged by Emmanuel Macron, retirement would be based on two points:

  • Legal age (which remains at 62 depending on the year of birth);
  • The pivotal age (without discount, which replaces the age of the full rate at 67) fixed at 64 years.

In other words, an active person will be able to retire from the age of 62 if he wishes, but will then suffer a discount of 5% per year until reaching the pivotal age, or 10%.

The current health crisis has frozen the application of the pension reform. The Executive at the initiative of the establishment of the pivotal age had suggested to employers and unions to propose another reform. But the deadlines being very short, this option could not be envisaged.. »Explains Journal des Seniors. However, the pivotal age was withdrawn from the bill following the request of employers and unions who, ultimately, “thanks?” to the Covid-19 crisis, will have to propose another measure to achieve financial balance by 2027.

Good to know: the pivotal age has been withdrawn, but the equilibrium age remains in force to determine at what age policyholders can retire with a full rate. It could therefore be set at 65 for workers born after 1975. Depending on life expectancy, this will increase even more.

What is the point of establishing a pivotal age?

The executive makes no secret of it, the idea is to rationalize all existing pension systems into one universal system. To achieve this, it is a question of establishing a points system, the same one that already exists for the complementary ones.

In fact, there will no longer be any question of validating quarters to claim a departure at full rate. Instead, pension contributions will be taken directly from professional income to earn points throughout one’s career. At the time of retirement, the points will then be converted into a pension.

The interest is twofold:

  • Reduce inequalities for people with incomplete or interrupted careers (maternity, unemployment, parental leave, etc.) so that they can retire at age 64 without a discount.
  • Encourage the French to stay in working life as long as possible possible after the pivotal age by applying a surcharge of 5% per additional year.

The impact on your retirement

With the pivotal age, the calculation of the retirement pension will be simplified. A simple conversion of points into euros will have to be made from the age of departure. It will be possible to liquidate the points obtained from 62 years old with a discount and from 64 instead of 67 to obtain full pension without a discount.

In the event that an active person decides to retire before the pivotal age, he will be penalized with a discount of 5% per year of anticipation. The prorating coefficient for the basic scheme will no longer exist.

Good to know: a person deciding to retire after the pivotal age will not only benefit from the increase of 5% per year made, but will also continue to accumulate retirement points! In this sense, his pension will be increased even more.

What about the current special cases?

Did you start your professional career young? The new pension scheme will provide for early departure under certain conditions for workers with long careers. The same goes for people with disabilities and / or those exposed to hardship factors during their professional activity. However, the terms and details are still unclear.

Who will be affected by the pension reform?

According to the calendar established before the health crisis, the reform should be applied from 2025 for all working people of retirement age, that is to say the generation of 1963. These people will then be able to retire without a discount at the age of 64 years. in 2028-2029.

For professions where the minimum retirement age is 57, the point-based reform will only concern workers born from 1968. Similarly, all people due to retire before 2025, regardless of their year. of birth, will be exempt.

These contributors will be the first to retire and obtain a pension according to the new rules enacted by the reform. However, this will only be possible if the change in contributions is maintained on January 1, 2025.

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