The French pension system is based on three pillars: mandatory contributions, funded contributions and supplementary plans. At the same time, the amount of payments for old age or disability in most cases allows a person to maintain at least a minimum standard of living. This is possible because even a very small pension in France will be increased by state supplements and benefits.
Pension law in France
Focusing on the demographic situation (the average life expectancy of the French has approached the 82-year mark), the French government decided to increase the age of retirement. They planned to gradually raise the bar from 60 to 67 years - this mark was taken as the full retirement age.
However, in 2021, the process had to be stopped, since the reform met with harsh condemnation in society, which resulted in street protests.
Today, pension provision in France for citizens and permanent residents of the country is based on two principles:
- Solidarity distribution - contributions that are paid by working people go straight to the payment of current pensions (basic and supplementary plans).
- The accumulation of individual pension points is a personal part of each insured person. It is gradually formed over the course of life and is paid after obtaining the right to a pension. The most common are two savings plans: individual - PERP and collective - PERCO.
The executive bodies in the general system of administration of supplementary pension provision in France are the associations AGIRC and ARRCO, which cover the majority of employers and their collectives. A small proportion of the employed population is involved in associations such as Ircantec (for non-state and local government officials), CRPN (for civil aviation flight crews) and CGRCE (for savings banks).
The French pension system is based on several pieces of legislation:
- Social Security Code - Code de la sécurité sociale.
- Law on the financing of social benefits in 2021 - LOI n ° 2018-1203 du 22 décembre 2021 de financement de la sécurité sociale pour 2021.
- General Tax Code of France - Code général des impôts.
The amount of pension benefits
Pension in France consists of two parts: basic and additional. The first part is calculated solely on the basis of the data of the employee himself: age of termination of work, insurance guard, the amount of income received and the number of points accumulated.
Additional amounts can only be paid if specific conditions are met. Most often it is the presence of a disability, low annual income, maintenance of dependents, housing problems. The French social support system has developed 35 pension plans.
The country has the concept of the minimum and maximum size of the basic part of the pension benefit. In 2021, these indicators are equal:
- minimum pension in France - 636.56 euros / month;
- the maximum payout is € 1,688.50 / month.
The total amount of all benefits paid to each individual pensioner from the state budget must not exceed 3,377 euros per month.
In practice, none of those who go on vacation (due to old age or in accordance with other reasons) receive almost only the minimum pension.
For those who do not have enough experience, during their life there was a small salary or a disability was established, various additional payments are provided. The most common are the Old Age Solidarity Allowance (ASPA) and the Disability Allowance (ASI).
There are quite a few social support options, so a potential recipient can use an online calculator on the website of the independent simulator My Aids. The service contains a detailed description and criteria for the appointment of 34 social benefits, not just pension benefits.
Due to the additional part, the average pension in France for a person who has worked for a sufficient number of years is approximately 1,000 euros per month.
Retirement age
By introducing new pension rules in the country, the French authorities intended to further push the border for retirement in old age - up to 67 years by 2021. However, they met with a strong protest from the population, and already in 2021 it was announced that the current retirement age would be "frozen" at around 62, but not lowered to the original level.
At the same time, for some categories the age of termination of work remained unchanged. Applicants for receiving maintenance from the state at the age of 60 and a little earlier can:
- those who worked in difficult conditions: night shift work, extreme temperatures, pressure, vibration and noise in the workplace;
- disabled people;
- employees with long-term careers who started their career at the age of 16 and earlier.
For a working Frenchman, it is important not only when they retire in France, but also the minimum required length of service during which the person was considered insured. It is these periods that give the right to full old-age benefit if a person has reached 62 years of age.
Pension legislation provides that the following length of service is considered complete:
- at least 162 quarters - for those born before 1951;
- 172 quarters or more - for those born after 1973 (the number of working periods increases gradually, depending on the year of birth).
Missing quarters can be "bought" by paying additional contributions for these periods. But you can add no more than 12 quarters.
When the seniority is still not enough for the appointment of a full old-age pension in France, a kind of penalty of 1.25% is applied to the calculated indicator for each missing quarter. The amount of the reduction in payments cannot exceed 25%.
In practice, this is expressed in a decrease in the coefficient from 50% of the average salary to 37.5%: the reduction step for people born after 1952 is 0.625%.
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Rules for calculating benefits
The basic pension is calculated according to the principle of determining the average earnings for a separate period of 25 years, and the years with the highest income are taken into account. The calculated indicator of the average salary is multiplied by 50% - this will be the desired size of the pension.
Civil servants receive 75% of their average salary, excluding bonuses. Additional payments are added to these amounts.
One of the most common supplements is the Solidarity Allowance for Seniors (ASPA - L'Allocation de solidarité aux personnes âgées). It is paid to pensioners who have reached 65 years of age (or 62 years old if a person has lost the physical ability to work by more than 50%) and receive less than the subsistence level. To understand what kind of pension in France in 2021 will be paid to elderly people with low incomes, you need to take into account that:
- the minimum threshold is 868.20 euros per month for one person and 1,347.88 euros for a married couple;
- the mechanism for calculating the supplementary benefit implies that the state pays the difference between the actual pension and the established limit of the minimum income.
In 2021, the supplement is equal to EUR 868.20 minus the accrued pension.
The payment is not due to everyone, it will be received only by:
- French citizens living within the country for 180 or more days a year;
- foreigners with a residence permit for 10 years or more;
- stateless persons, refugees;
- foreigners who fought on the side of the French army and receive military pensions in France.
Persons who have reached full retirement age (67 years) can receive a retirement pension, regardless of the length of the insurance period. In 2021, an old-age pensioner must receive at least 868.20 euros per month.
Pensioners from other countries
The procedure for assigning and calculating a pension benefit for foreigners in France depends on whether there is an agreement between the two states on mutual social security and credit for work experience.
Among the states bound by social agreements with France are EU members, as well as Algeria, Andorra, Argentina, Bosnia and Herzegovina, Brazil, Cameroon, Canada, Chile, Congo, Korea, USA, Channel Islands, India, Israel, Japan, Kosovo , Macedonia, Mali, Morocco, Mauritania, Monaco, Montenegro, Philippines, Quebec, San Marino, Senegal, Serbia, Tunisia, Turkey, Uruguay.
Citizens of other countries in order to assign a pension of 800 euros / month in France will have to comply with several essential conditions:
- permanently (more than 183 days a year) reside in French territory for 10 years or more;
- be over 65 years old;
- have an income of not more than 9,600 euros per year per person or 14,904 euros per family.
Procedure for receiving payments
It is unusual for Russians who come to France that pensions are taxed here, including on solidarity, so the net amount of the benefit will be slightly less than the accrued one. The minimum payment, social pension in France and allowance for veterans of the French army are exempted from taxation.
For Russian citizens living outside their country, there are two options for receiving benefits earned at home:
- Pensions accrued until 2021 can be paid in the currency of the country in which the pensioner permanently resides, by transferring to a foreign bank account. You can apply for a pension through the Russian Embassy.
- Payments scheduled after January 1, 2021 can be paid exclusively in Russian rubles and only to the accounts of domestic banks. At the same time, a pensioner needs to annually confirm that he is alive (Decree of the Government of the Russian Federation No. 1386 of December 17, 2021).
Leaving the Russian Federation for a period of more than 6 months or having received a residence permit in another country, a Russian pensioner must notify the Russian pension authorities of this at least 30 days in advance.
You can continue to receive your earned pension not only to your bank account. If you issue a notarized power of attorney for someone close to you, this person will be able to receive benefits using it, and then send money to their owner.
All procedures, including the annual confirmation of the fact of being alive, can be carried out through consular departments abroad.
The best places to live for retirees
Unlike young single people and families with children, elderly people are not so important about the prospect of successful employment and infrastructure in the form of a school, kindergarten, affordable pediatric care, and places for safe walks.
It is more important for pensioners that the new place of life is relatively quiet and calm in terms of crime. An additional criterion will be the availability of shops within walking distance from home and a good medical institution.
According to an international study of living standards in different countries, several places have been identified in France at once, suitable for those who want to relax in peace in retirement:
- Bordeaux - the city has found the perfect balance between tranquility and active recreation opportunities for retirees, plus good and inexpensive cuisine.
- Lyon attracts long warm summers and mild winters, the chance to visit Italy and Switzerland without overcoming long distances, as well as a large number of cultural events.
- Languedoc-Roussillon - those who like a warm climate, relatively cheap food prices and an extensive transport network are moving to the cities of this region.
Conclusion
The peculiarities of the construction of the French pension system lead to the fact that the majority of elderly people, when they retire, plan active recreation and the opportunity to travel. Due to payments under additional plans, many French people over 62 years old receive help to pay for housing, support for dependents, which significantly eases their financial burden. In general, many retirees in France live more comfortably in terms of money than working citizens with an average income.
