General Scheme for Employees in Industry and Commerce

Mandatory insurance

• Employees working under a labour contract (contrat de travail).
• Specific groups equal by law to employees (such as home workers, sales representatives, workers in hotels, cafés and restaurants, managers of companies under particular conditions, freelance journalists).  
• Since 2018, self-employed persons (excluding liberal professionals); before 2018, the self-employed were covered by the special public pension scheme, the‘Régime social des indépendants, RSI’. 

Exempted

• Persons mandatorily affiliated to another public pension scheme. 
• Persons considered as non-employed by law (such as persons who are registered in the business register, the Registre de Commerce et des Sociétés (RCS)). 

Voluntary insurance

• Formerly mandatorily insured persons can request to continue insurance on a voluntary basis.
• Carers of invalid family members.
• Persons working abroad who have previously been mandatorily insured.
• Parents taking care of a child under 20 years of age who are not affiliated to any mandatory public pension scheme.

General finances

• Mainly PAYG-financed from insurance contributions.
• Partly tax-financed out of the national budget.

Contribution rates to mandatory insurance

• Fixed share of monthly gross earnings (15.45%) with contribution assessment ceiling (EUR 3,428). 
• Contributions shared between employer (8.55%) and employee (6.9%).
• Special provisions for contribution payments apply to the self-employed.

Taxation of contribution payments

• Tax exemptions for insurance contributions. 

• The National Old Age Insurance Fund (Caisse nationale d’assurance vieillesse, Cnav) is in charge of the administration. Its mission includes maintaining the financial balance of the regime, determining future orientations, and assuring the coordination.
• Regional Retirement Insurance and Occupational Health Offices (Caisses d’assurance retraite et de la santé au travail) are responsible for the ordinary services of the old age pension (such as payment).

Qualifying conditions

• Statutory (minimum) retirement age increases to 62 and retirement age of full-rate pension increases to 67 for insured persons born after 1955.
• Full-rate old age pension: the insured person must either be 62 years old (if born after 1955) and have a minimum contribution record of 172 quarters (= 43 years; if born after 1972) or must have reached the age of 67 (if born after 1955). 

Early retirement

• Benefits can be claimed before reaching the statutory (minimum) retirement age only by persons (born after 1955) with a long working career (age: 60), persons with disabilities (55), and persons working in arduous jobs (age 60); available without permanent negative adjustments to pension benefits.

Deferred retirement

• Retirement can be deferred; with positive (permanent) adjustments (surcote) to pension benefits (at least 0.75% every three months), if qualifying conditions for full-rate old age pension are met. 

Combining employment & retirement

• In general, the payment of pension benefits must be preceded by the termination of the employment relationship. 
• The person is allowed to restart a professional activity if the employer has changed, if a certain time (6 months) has passed between the two activities, or if the activity is of another type (e.g. self-employment).
• ‘Partial retirement’ is possible under specific conditions.

Pension benefits

• Primarily based on the amount of contributory earnings of the best 25 years including a bonus for raising children and for taking care of dependent persons. 
• Maximum amount: benefits cannot exceed 50% of the ‘social security ceiling’ (plafond de la sécurité sociale) which is determined yearly by the legislator.
• Minimum pension (minimum contributif): similar to the minimum wage, i.e. around EUR 1,200 per month (lower amounts are possible under certain conditions), if the pension benefit is below a minimum level and if qualifying conditions for full-rate old age pension are met.

Benefit calculation

• Based on the multiplication of the following factors: 
• The retiree’s average annual salary of the 25 best years in terms of earnings.
• The ‘proportional factor’ calculated according to the ratio between the pensionable period and the required period for a full pension. 
• The ‘pension rate’ which will be applied to the average annual salary cannot surpass 50% (= full pension rate). It is reduced if the pensionable periods are less than 172 quarters.
• Adjustments: yearly adjustment of pension value decided each year by the Law on the Financing of Social Security.

Taxation and social security contributions

• Pension benefits are subject to income tax according to the rules applicable to salaries.
• Pension benefits are not subject to social contributions, except the CSG (contribution sociale généralisée) and CRDS (contribution au remboursement de la dette sociale), two special solidarity contributions to the financing of the social security system.