To obtain a full retirement pension, it is not enough to have reached the legal age to stop working. You must also have contributed the necessary number of quarters. Otherwise, the pension paid is reduced. Here is how this discount is calculated.
The pension reform adopted in November 2010 caused a stir and in particular formalized the extension of the retirement age. The latter started from July 1, 2011; date from which the starting age increases by four months per year to reach 62 in 2018. Today, if you have passed the age of 60 but you do not collect the sufficient number of quarters, the situation remains the same with the application of the reform: you must continue to work until age 65 at the latest to obtain the full rate of liquidation. Of course, you can decide to retire without waiting to have all of your quarters. In this case, the amount of your pension will be calculated with a reduced pension rate: this is called the discount.
The latter is applied for each quarter that is missing to benefit from the full rate. The number of missing quarters is calculated in two ways. Either by the number of quarters separating the age at which the pension takes effect and the age for full retirement (65 years for an insured person of the 1950 generation); or by the number of quarters necessary to reach the duration of insurance required for a pension at the maximum rate (162 quarters). In the end, the most advantageous calculation between the two is retained. But beyond twenty quarters missing, the equivalent of five years, the discount no longer affects the amount of the pension.
Practical case of a discounted retirement pension
The discount is associated with the reduction coefficient. For insured persons born before January 1, 1944, it was 2.5% per missing quarter for insured persons. For the others, it decreases by 0.125 points per year to reach 1.25% for people born after 1952. Take the example of a person born in 1950 who now wishes to retire at age 61 with only 156 validated quarters. He misses eight quarters in the first calculation and sixteen in the second to hope to obtain a full pension rate. The reduction coefficient that applies to it is 1.625% per quarter. If we multiply it by the eight quarters used, this gives a discount rate of 13%. The latter must be subtracted from the full rate settlement rate: 50%. Which gives the following calculation: 50 – (0.13 x 50) = 43.5.
In our example, the absence of eight contribution quarters leads to a reduction in the payment rate. It goes from 50% (full rate) to 43.5%. In other words, the retirement pension will correspond to the average salary of the twenty-five best years multiplied by 43.5%. If this average monthly salary is 1,000 euros for example, the amount of the pension with a discount will be 435 euros per month against 500 euros with all the quarters. This system is applied to private sector employees but also to craftsmen and traders as well as to the self-employed and farmers, according to the same calculation. For a civil servant, the discount only applies if, at the time of his retirement, he has not reached an age set in the age limit of his grade which varies in 2011 between 57 and 62 years.
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