At the start of 2020, France had nearly 15.5 million retirees. 37% of them received a monthly pension of direct entitlement (not taking into account survivors’ pensions) of less than 1,000 euros gross. These small pensions, the number of which is declining, mainly affect women.
provides a diagnosis of the situation of the people concerned and then suggests ways to revalue these small pensions.
Modest pensions and retirees
The threshold of 1000 euros of gross monthly pension, which corresponds roughly to the poverty line for a single person, was adopted to define a small pension. It is a little higher than the eligibility ceiling for the solidarity allowance for the elderly (Aspa)(new window)and slightly lower than an objective of the bill establishing a universal pension system : a pension equal to or greater than 85% of the minimum wage(new window) net for a full career.
Low pensions mainly concern :
- people with an incomplete career due to late entry into the labor market, periods of inactivity (unemployment, childcare) or early career termination (illness, incapacity);
- those who have had an extended part-time job;
- women (52% receive a low pension compared to 20% of men);
- individuals born abroad or having spent a large part of their career abroad;
- the self-employed, in particular farmers and their collaborating spouses;
The number of retirees is increasing but that of low-income retirees is falling because careers are lengthening, solidarity mechanisms are strengthened and women are working more and more.
Revalue small pensions
The number of small pensions remains high. To reduce it, the report recommends:
- to improve the information provided from 45 years on their pension rights (especially in case of risk of low pension) so they can make appropriate career choices;
- to rehabilitate social contributions, the amount and duration of which determine the level of pension. This may involve, for example, authorizing the employer to partially finance the purchase of retirement quarters (studies, internships, etc.) for young employees, increasing the minimum contribution base for craftsmen and traders to validate four quarters instead of three, or to allow the acquisition of new pension rights in the event of combining employment and retirement;
- to revalue acquired rights by raising pensions to a threshold of at least 85% of the net minimum wage for a full career by 2025. This measure would cost several billion euros. As the retirement system is in deficit, the most well-off retirees should be involved (reduction of the 10% income tax allowance for pensions, additional levy on transfers of assets, etc.) or businesses and assets (creation of a second day of solidarity(new window), increase in contributions).