The pension reform will come into effect on September 1. All departments in mainland France and overseas are concerned, with the exception of Mayotte. What impact do these measures have for overseas residents?
If the pension reform has aroused (and this is still the case) strong protest everywhere in France, including among overseas residents, it will therefore come into force on September 1. In particular, they plan to pass legal retirement age from 62 to 64 by 2030.
In the Overseas departments, the actual retirement age was already out of step with France. In 2021, according to the National Old Age Insurance Fund (CNAV), it was already staggered between 64.3 years (La Runion) and 65 years (in Guyana), while it was only 62.7 years in Metropolitan France. By raising the legal retirement age to 64, will overseas residents necessarily have to work until the age of 67 to benefit from a full pension?
The Minister of Labor Olivier Dussopt had recognized on January 24 a later departure for Overseas: I am not saying that it is good news because it is sometimes the testimony of axed careers, he explained . But what I mean is that we will ensure in these territories as elsewhere that the reform is applied as fairly as possible. He then added that in territories where the effective starting age is already above the next legal age of eligibility, the application of the reform may be less aggressive.
Overseas workers work longer for lower pensions
If the retirement age of overseas residents is later than in mainland France, this is particularly linked to the labor market which is more restricted than in mainland France. As a result, the Reunionnais had more career slowdowns and interruptions.
Thus, at the end of 2016, only 41% of them had had a full career, compared to 62% of those who retired from mainland France, reports INSEE in a study published in 2022.
As a result, in 2016, the average retirement pension in Reunion was 28% lower than in mainland France, only getting up 1160euros gross per month, according to INSEE. Other factors explain these inequalities such as the level of qualification, points out INSEE, but also the minimum wage aligned Reunion in 1996 with the national Smic.
The situation in Réunion is also applicable in the other overseas departments. In its study on extreme poverty, which is more frequent and more intense in the overseas departments, INSEE specifies that many of these withdrawals were faced with unemployment, part-time work, or even informal workresulting in reduced pension levels.
Pension reform: what changes for small pensions from September 1
The overseas territories are thus more numerous in 2021 (54% in Runion, 47% in Martinique and Guadeloupe and 39% in Guyana) than in mainland France (35%) benefit from the minimum retirement pension. Even if this must be revalued in some cases up to 1,200 euros gross, overseas residents have to face a very high cost of living.
According to the Competition Authority, the general level of consumer prices is from 7% to 12.5% higher in the overseas departments.
Anne-Sophie Alsif, Chief Economist at BDO France, asks Overseas the 1stfears a double penalty for ultramarines: You have a 10-year gap [d’esprance de vie] between executives and workers, and indeed in the overseas territories you have people who are less qualified.
The advantages of retirement from the civil service in the Overseas departments
Being a civil servant born in the overseas departments and being a civil servant transferred to the overseas departments are not the same thing. And for good reason, the latter benefit from more advantages than the former. Focus on what it brings to be a civil servant in a little corner of paradise.
- Civil servants originally from or transferred to the overseas departments benefit from overpaymenti.e. an increase in their gross salary which reaches 40% in Guadeloupe, Guyana, and Martinique and 54% La Runion. A measure justified by the difference in the cost of living with France. This over-remuneration increases their pension rights, which are included (up to 25%) in the calculation of contributions.
- Civil servants in Overseas France benefit from an additional retirement benefit. For each 3-year period spent overseashe receives one year bonus of his contribution period necessary to receive a full rate pension.
- For this last advantage, only retirees from the state civil service are concerned. They benefit from a temporary retirement allowance (ITR), also set up to offset the cost of living overseas. In 2018, the compensation reaches 8000 euros in all overseas departments and regions (DROM). You disappear, the ITR loses since 800euros each year until disappearing definitively in 2028.
Pension reform. Long career: what is looming with the draft decree