The level of retirement pensions depends on his working time, his contribution period to pension insurance, and of course the income received throughout his life. A person paid the Smic (the minimum wage in force in France) during his professional career will not be able to receive a very high pension once he retires since his calculation is based on the average of his gross wages, which gave rise to contributions to the general pension scheme, during the most advantageous 25 years of his career. In order to guarantee these smicard retirees a minimum of income, there are two main systems which make it possible to supplement their pension:the minimum contributory and the solidarity allowance for the elderly.
For all private sector employees, whatever their salary, at the minimum wage or more, the calculation of the amount of their basic social security retirement pension at the full rate is the same. This full rate is set at 50% of the average annual salary. The formula thus applied to know the amount of his retirement pension is:
Average annual income x Pension rate x (Duration of insurance of the employee under the general scheme limited to the maximum duration of insurance according to the year of birth / Duration of insurance to obtain a full pension).
To receive a full pension, you must meet conditions, in particular related to your year of birth and the number of quarters of pension insurance acquired according to your age. For example, if you were born in 1973 or later, you must have a pension insurance period of at least 172 quarters, i.e. 43 years, to claim a full pension.
To validate a quarter in the private sector, you must, during the year, have contributed to pension insurance on the basis of a gross salary equal to 150 times the hourly minimum wage in force on January 1 of the year concerned, that is, currently, having received at least €1,537.50 during the year. This level varies when the minimum wage is increased.
The amount of your pension also takes into account your average annual salary, i.e. your average annual remuneration calculated on the basis of the Smic in the case that interests us. This average annual salary is calculated on the average of the gross salaries which gave rise to contributions to the general pension scheme during the 25 most advantageous years of your career.
For those who have worked less than 25 years, the average annual salary taken into account is the average of the gross salaries, here paid at minimum wage, that you have received during your years worked.
If you have always received a salary equivalent to the Smic and you have always worked, the average annual income considered to calculate your pension is fully taken into account, unlike those for whom this income exceeds the Social Security ceiling ( €41,136 annually in 2021). For the latter, the part of their income above this ceiling does not count for the calculation of their retirement.
In addition to this basic pension, for all private sector retirees, whether paid the Smic or not, there is a supplementary pension (Agirc-Arrco), which allows them to acquire points of a certain value in euros (in 2021:1 2841 €, and their number is indicated for each person on the personal career record made available by the Retirement Insurance). These points come to improve the amount of basic retirement pensions in particular of the people who perceived all their life the minimum wage in force (the Smic).
Given the method of calculating retirement pensions based on the amount of income received during his professional career, an employee who has received a salary equivalent to the Smic throughout his life cannot count on a very high pension once retired.
In order to ensure, despite everything, a decent minimum income for smicard pensioners in particular, there are measures intended to guarantee a basic standard of living.
We then speak, for assets who depend on the general social security system, of the minimum contributory. This is a retirement pension that cannot be less than a certain amount. To benefit from it and hope to receive a higher pension than that guaranteed by a whole career paid at the Smic, you must meet several conditions:be entitled to a basic retirement pension from the general scheme at the full rate, have liquidated your basic pensions and complementary, and not to receive an amount of pensions (basic and complementary pensions combined, and once the minimum contribution has been paid) greater than €1,203.37 per month.
The minimum contribution is automatically calculated and paid for retirees eligible for this scheme, retirees who have only received low wages during their career. It currently represents €645 to €705 per month depending on the number of quarters contributed to the pension insurance.
Retirees who have been paid the Smic all their life and who have a low pension can also, under certain conditions, benefit in addition to the solidarity allowance for the elderly (Aspa). Its amount varies according to the resources and the composition of the household and allows single people to benefit from an income of at least €906 per month, and for a couple from €1,407. The pensioners concerned must request this allowance from their pension fund.
