The losers of the pension reform forgotten by Olivier Dussopt
The sentence of the Minister of Labor could have been experienced as a provocation, the day after massive protests against the pension reform project. On France InterWednesday March 8, Olivier Dussopt assured that “when we save the pay-as-you-go system, there are no losers”. An echo of the statements he had made four days earlier in Parisian : “There will be no losers. Because the pensions will not go down. The reform requires efforts from the French. That yes. But we make sure that they are distributed as fairly as possible. »
Olivier Dussopt’s formulation suggests that, if the reform does not lower the amounts of pensions, then it cannot lead to losers. However, as we already wrote in an article at the beginning of January, this pension reform will have many winners, but above all losers. With the increase in the legal retirement age from 62 to 64, an employee obliged to work two more years to receive a pension of an amount close to that which he would have received without the reform can legitimately feel “loser”.
The possible negative consequences are not only financial: they are also, for example, additional years of exposure to hardship factors, or fewer years in good health (in 2018, almost a quarter of French people declared a physical limitation in their first year of retirement, according to the Department of Research, Studies, Evaluation and Statistics, DREES).
Furthermore, postponing the legal age may push some seniors into unemployment. The previous reform, which had raised the age from 60 to 62, had thus led to an increase of 100,000 beneficiaries over 60 between 2010 and 2022, according to Unédic.
Here is a non-exhaustive selection of typical cases of workers injured, from an individual point of view, by this pension reform, contrary to what Olivier Dussopt asserts. Please note: some details may change due to the examination of the bill currently in Parliament. Furthermore, the few examples of “losers” proposed here are concentrated on the so-called “basic” retirement pension, in particular because the rules for supplementary pensions could be subject to change.
Emmanuel, born in January 1965, office worker for thirty-seven years
before the reform. Emmanuel started working at the age of 21, in January 1986, as an office worker in the private sector. He has therefore contributed 149 quarters to date. In total, Emmanuel must contribute 169 quarters (42 annuities) to retire at full rate. He can therefore retire at the end of the first quarter of 2028, at 63 years and 3 months (or as soon as he turns 62, but with a lower pension), with all the quarters required.
After the reform. Emmanuel will no longer be able to leave at 62. He will still be able to retire at 63 years and 3 months, but the amount of pension would be lower than before the reform, since the contribution period required for people of his generation increases to 172 quarters (+ 3). If he wishes to leave at full rate, he will therefore have to wait nine additional months – that is until the beginning of the year 2029, at age 64. Before the reform, these additional months of work would have been optional (beyond the legal retirement age and the required insurance period), and would have allowed him to benefit from a surcharge 3.75% of his basic pension (at 1.25% per quarter).
Roxanne, born in 1978, employed since she was 21, one child
before the reform. Roxanne started working at age 21. She had a child in 2002, which allows her to obtain 8 trimesters for maternity and education. At 62, the legal retirement age, she will reach the 172 quarters to be validated for people of her generation (including 164 who contribute while working). She can choose to retire at the full rate, or continue to work in order to have a better basic pension, thanks to the surcharge mechanism (increase of 1.25% per quarter).
After the reform. As the legal retirement age has been pushed back, Roxanne will not be able to retire before age 64. The eight additional quarters that it will validate with these two additional years will be of no use to it, since it is necessary to have reached the legal age to benefit from a premium. Right-wing senators have proposed an amendment aimed at granting mothers “the benefit of a premium of 1.25% per additional quarter for policyholders who have reached the required insurance period one year before the legal age, i.e. 63 years old at the end of the ramp-up of the reform”. These discussions have yet to take place in the Senate and are not definitive at this time.
Sylvie, born in 1962, unable to work
before the reform. Suffering from a non-occupational disease which has reduced her ability to work, Sylvie will not, at age 62, have the number of quarters required for her generation. She does not receive a disability pension, but uses the medical procedure to have his incapacity for work recognized. This allows him to retire at full rate from the age of 62, regardless of the number of quarters validated.
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After the reform. The government wishes to create an early retirement age to allow disabled or incapacitated people to retire at the age of 62 at the full rate, “without discount, whatever the duration of the insurance”. The reform will therefore have no impact on the retirement age of Sylvie, who can always leave at 62 (while the legal age is postponed to 64 for other employees). Remember, however, that even at full rate, the calculation of the basic pension takes into account the number of quarters validated in relation to the number of quarters required. Since the reform requires her generation to complete an additional term, if Sylvie leaves at age 62, she will therefore receive a slightly lower basic pension than before the reform.
Pascal, born in May 1968, hairdresser since he was 18
before the reform. Having had a long and uninterrupted career, with more than five quarters contributed before his 20th birthday, Pascal will be able to claim an early departure of two years (i.e. 60 years old instead of 62 years old). He will be able to leave at age 60 and a half, after having contributed 170 quarters (i.e. 42 years and 6 months).
After the reform. He will be able to claim an early departure from the age of 62 (i.e. two years before the legal age, which will be raised to 64), since he fulfills the condition of having worked five quarters before the age of 20. To reach this new early departure age, he will therefore have contributed 44 years, or 176 quarters. Pascal will therefore have to work a year and a half longer. These quarters will not allow him to benefit from a premium, since this requires having reached the legal retirement age (and not the early retirement age for a long career).