Following the 2023 pension reform, many retirees expected their pensions to increase due to the increase in the minimum contribution amount. However, this increase is currently overdue for about a million people.
The purpose set out by the Pension Reforms
The objectives of the pension reform include raising the statutory retirement age and increasing the number of quarters required to receive a full pension. The government thus wanted to achieve a pension threshold of 85% of the minimum wage for employees who had completed their entire career on the minimum wage. To achieve this, it decided to increase the minimum contribution amount and its enhanced amount, as well as to implement the measure retrospectively for all retirees concerned.
1.7 million people are affected by this move
In total, about 1.7 million retirees are affected by the increase in minimum contributions, of which about a million are still awaiting the move’s implementation. The National Old Age Insurance Fund (Cnav) promised several waves of revaluations to cover all cases by autumn 2024, but it is currently facing difficulties in identifying and implementing these increases. Indeed, related retirees’ files are often complex, especially for those who have contributed to multiple pension funds or whose career increases must be reconstructed to apply.
Possible delays in the estimated schedule
According to Cnav General Director Renaud Villard, the initial schedule is unlikely to be respected: “ I don’t think we can do better; The deadline is already very tight” He also mentioned the possibility of a delay in the implementation of this measure, which directly affects about one million retirees. However, they should get this increase retroactively from September 2023.
Who is affected by the increase in minimum contribution?
To avail this additional benefit, retirees must meet certain criteria. First, they must liquidate their pension with the full insurance period, i.e. all the required quarters. Second, their total retirement pension must be less than €1,367.51, meaning they have contributed less salary throughout their career. If these conditions are met, their pension will automatically increase up to the floor amount of the minimum contribution amount.
New values for minimum contribution and its increased amount
With the government decision and the revaluation carried out in January, the value of the minimum contribution is now €733.03 gross per month. For the enhanced contribution minimum, it is set at €876.13 for those who have contributed at least 120 quarters. The increase should concern a large number of retirees who have worked at pay levels close to minimum wage throughout their careers.
Payment schedule
Of the 1.7 million promised raises, only 600,000 have been given to eligible retirees. For the remaining million, the deadline is September 2024. However, Cnav General Director Renaud Villard warns that we have to be patient and that “ We can’t do better“Concerned people will have to wait for a few more months to see the increase in their pension.
An average increase of €60 for future beneficiaries
According to information communicated by Renaud Villard, for the 600,000 people already affected by this measure, their pensions increased by an average of €50. On the other hand, for the thousands of retirees who are still waiting for this adjustment, the average increase should be slightly higher, around €60. This difference is explained by the fact that the latter generally receive a lower pension than those who were able to benefit from it as soon as it was applied.
In conclusion, if this revaluation of small pensions proves promising for the retirees concerned, many of them will have to wait before experiencing a concrete improvement in their financial situation.
