Receiving a full rate pension automatically at age 67 will always be possible, even with the pension reform largely validated on Friday by the Constitutional Council. However, the automatic full rate is not as advantageous as you might hope. Here’s why.
This was one of the questions raised by the pension reform largely validated by the Constitutional Council on Friday. There full rate automatic retirement age 67 will it be changed? The answer is negative. The current system will continue. And this mechanism hides many subtleties. If you get it, it is not at all certain that you will receive a retirement pension as high as expected. Explanations.
To be able to receive a full-rate basic pension from Social Security, without any discount, you must have a precise number of quarters of pension insurance: 166 monthsi.e. 41 years and one semester, for people born between 1955 and 1957 or even 172 quartersor 43 years, for those who were born from 1965 according to the pension reform project, and no longer 1973 as at present.
Pay attention to the discount
Retiring before age 67 without having the required number of quarters of pension insurance reduces the rate used to calculate your basic pension. In the private sector, the full rate is fixed 50% of the average gross salary of the best 25 years. This rate will be less than 50% if you do not reach the age or the number of quarters required for the full rate.
This mechanism is called the discount. For a missing quarter, the retirement rate is 49.375%. Indeed, each missing quarter reduces by 0.625 point the rate applied to your pension. With 20 quarters less, 5 years of contribution therefore, the rate of the basic pension goes from 50% to 37.5%!
And for supplementary retirement?
A private employee is entitled to a basic social security pension and a supplementary one from Agirc-Arrco. The amount of the latter can be increased or reduced, especially if you apply for it before age 67. This is called the temporary reduction / increase mechanism.
Supplementary retirement: why you should scrupulously check your career statement
But the current system planned to limit the effects of this discount. Indeed, it provides that the basic pension of the Retirement insurance is granted full rate, regardless of your number of validated quarters, in the event of retirement 67 years old.
Full rate and maximum rate, a big difference
But be careful, you can have a full rate pension and still not have a pension at maximum rate possible, remind the site public service. Indeed, the amount of the basic pension is a function, on the one hand, of the average of the gross salaries of the 25 best years, and on the other hand, of the number of quarters of pension insurance.
Method of calculating the full rate retirement pension
Average gross annual salary X 50% X your number of quarters of pension insurance / Number of quarters of pension insurance required to have a full rate pension
Concrete illustration with the example of a person born in 1961 with an average annual gross salary of 30,000 euros. She must validate her 168 quarters required (42 years) to have a full rate pension. His basic annual pension will therefore be 15,000 euros gross, i.e. 1250euros gross per monthexplains service-public.
But in the scenario where she retires at age 67 with only 162 quarters (40.5 years), her full rate pension will be lower with regard to the calculation rule:
Average gross annual salary x 50% x 162 / 168
In this case, his pension will be full rate without discount, but it will only receive 14,464.29 euros gross, i.e. 1205.36 euros gross per month. A difference of almost 45 euros per month for having contributed 6 quarters less than the 168 required to obtain the maximum amount of his pension.
Retirement: how much will you earn at full rate or at age 67?