In France, retirement pensions are calculated in two different ways depending on the pension scheme to which one is affiliated. Most basic pension schemes are based on the system of annuities, also called quarters, to determine the amount of pensions for each retiree. Others, including certain supplementary pension funds, such as Agirc-Arrco for example, use the point-based pension system to calculate the pensions of its policyholders.
In France, the pension system is based on 3 main principles common to almost all existing pension schemes (42 pension schemes are counted).
The French pension system is, in fact, compulsory, i.e. everyone who works contributes to their future retirement, and also benefits from contributions paid by their employer. These contributions are proportional to the salary received.
Second, our pension system is pay-as-you-go. This means that the contributions paid by people who work in a given year are used to finance the pensions of those who retire in that same year.
Finally, the French pension system is said to be contributory because the amount of retirement pensions depends on its "contribution" to the labor market, i.e. on its earned income, its retirement age and the number of years worked.
In France, the system for calculating retirement pensions can take two forms. Either it is based on annuities (expressed in quarters), that is to say the duration during which an active person has contributed, or the contributions paid throughout his professional career give the possibility of accumulating points which allow the time of retirement to calculate his rights and therefore the amount of his pension.
Unlike the system for calculating retirement pensions, which is based on the number of quarters validated during one's professional career, retirement by points is based on the accumulation of points also acquired throughout one's working life.
When a working person pays contributions for his retirement, the amount of the latter is accumulated over a year and then transformed into a number of points. The contributions paid by his employer also top them up and are also transformed into points. The points thus accumulated over a year are added to those acquired in previous years.
Good to know:periods of inactivity such as periods of unemployment, maternity leave and sick leave also allow you to acquire points.
At the time of retirement, the points acquired throughout his professional career are used to calculate the gross amount of the retirement pension. Their total is thus multiplied by what is called the purchase value of this point which is fixed each year.
The Agirc-Arrco supplementary pension plan to which all private sector employees must contribute, and which is added to their basic pension, is based on the points-based pension system.
Indeed, the contributions on their gross remuneration (at the rate of 7.87% for an annual remuneration up to 41,136 euros and of 21.59% between 41,136 and 329,088 euros) paid during their professional life to Agirc-Arrco these employees, as well as the employer's contributions paid by their employer, make it possible to acquire points which then serve as the basis for calculating their retirement pension.
These points are calculated according to the following formula:
(Remuneration x acquisition rate of points) / purchase value of the retirement point.
The points acquisition rate is set by Agir-Arrco (6.20% for compensation below 41,136 euros and 17% above). The purchase value of the retirement point is also called the reference salary by the organization. In 2021, the latter is equal to 17.3982 euros.
Let's take an example:the number of points acquired by an employee who receives 40,000 euros gross per year is calculated as follows:(40,000 € x 6.20%)/17.3982 =142.54 points. Then simply multiply the number of points acquired by the purchase value of this point to find out the amount of your Agir-Arrco supplementary retirement pension.
Agirc-Arrco lists these points on an "individual retirement points account" specific to each insured person, which can be consulted at any time on the website of this supplementary pension scheme.
To know: this point-based pension system is the one favored by the pension reform currently underway. The latter provides that it must replace the system based on the number of quarters acquired during one's professional career and apply to all assets with the aim of developing a universal pension system, that is to say the same for all.
