Pension Reform: what this means for France

According to the Office of Research, Studies, and the Evaluation of Statistics (Drees), 4.4 million people were receiving a revised pension at the end of 2016, or a quarter of the 17.2 million pensioners in France.

According to Le Monde, if they meet the conditions imposed by his former spouse's plan, the beneficiary of a reversionary pension will ultimately receive between 50% and 60% of the deceased's pension. According to a study by the Drees in 2016, the average amount of a survivor's pension would amount to €607 gross per month at the end of 2012.

Calendar

The first stage consists of a preparatory phase for the drafting of the future draft law; consultation is under way with the social partners under the responsibility of the High Commissioner for Pension Reform, Jean-Paul Delevoye.

After a second consultation, President Macron would like the texts to be finalized before the summer of 2019 so that the bill can be presented in June 2019.

Finally, it is expected that this bill will be voted on in Parliament in the last quarter of 2019.

Current general regime

In the event of the death of a spouse, the surviving spouse may receive a survivor's pension, i.e. a portion of the deceased spouse's retirement pensions.

However, certain conditions must be met:

- Marriage: you must have been or currently be married to the beneficiary of the retirement pension, so even long after the divorce, the surviving spouse retains the right to apply for the reversionary pension

- Income conditions: in 2017, the annual income of the surviving spouse must not exceed 2080 times the minimum wage, i.e. approximately €20,550 for a single person or €32,880 if the spouse lives in a couple

- Age: the surviving spouse must be 55 years old, however, the right is not lost if the age requirement is not met, it will only be necessary to wait until the necessary age to apply

The amount of the survivor's pension is capped at a monthly amount of €893.97.

For civil servants, the restrictions are more specific. The duration of the marriage must be at least 4 years and the marriage must have been celebrated at least 2 years before the deceased's retirement. However, in this situation there are no resource requirements or limits on the amount allocated. In addition, the former spouse must live alone, if he or she is remarried, in a union or cohabiting, he or she is not entitled to a pension. Finally, at least one child must be born from the union.

For all plans, if the deceased has been married several times, each plan's share is calculated in proportion to the length of the marriage. If one of the beneficiaries dies in turn, his or her share will revert to the other surviving beneficiaries.

Reform

The 2019 reform of the pension system will therefore have an impact on the reversionary pension system. The President would like for pensions to be calculated on the basis of the points acquired over the course of an individual’s career. It is therefore the income received by the deceased that will influence the number of points they will earn during their lifetime; however, certain events, such as a birth, will also be awarded with points.

The reform will aim at harmonising the conditions of allocation in order to better take into account the beneficiaries with the lowest resources. However, this reform is still at the discussion stage. According to the President of the Republic, people who were already receiving a survivor's pension before the reform came into force should not be affected by the new measures.

Finally, according to Jean-Paul Delevoye, "one of the measures under study would be to introduce a system of sharing pension rights between spouses, taking into account all of the couple's income. »

It would also be possible for a spouse who has had a good career to transfer part of their points to a partner who has never worked in the form of a contract.

A splitting system could also be introduced to ensure that the surviving spouse's standard of living is maintained by taking into account the amount of his or her personal pension. A concrete example was given by Jean-Paul Delevoye: "If Mr. Earns €2000 and Mrs. €4000, that makes a total of €6000 for the couple. In the event of one of their deaths, it can be decided that, to maintain the standard of living at 50% of that salary is required for the pension, i.e. €3000 euros. In this case if Mr. dies, Mrs. has nothing because she already receives more than €3000. However, if the wife were to die, the man receives €1000 euros to bring him to the €3000 threshold. »

However, as of now, nothing finite has been decided.