What pension do you get by earning the SMIC?

In France, there are various pension systems, including Retirement Insurance for employees in the private sector and State Retirement for civil servants. Pension reforms also have an impact on the SMIC pension amount, by changing the conditions of departure and the methods of calculation. For some SMIC employees, early retirement may be considered, provided that certain conditions are met.

Key points
- Factors determining how much a person retires at the SMIC include starting age, length of career, and income received
- Social security contributions and ceilings influence the calculation of the SMIC pension amount
- Pension reforms and conditions allowing early retirement may affect the pension amount for employees at the SMIC.

Understanding the SMIC pension amount

How much a person retires at the SMIC depends on several factors, including retirement age, length of career, and earnings received for jobs. To better understand how the calculation of the pension amount at the SMIC works, it is essential to take these key elements into account.

First of all, the retirement age is a decisive factor in calculating the amount of retirement. Indeed, the sooner a person retires, the more the amount of their pension will be reduced. It is therefore important to choose the right time to retire in order to maximize the amount of your pension.

Second, career length is another factor that influences the amount of retirement. The longer a person has worked and contributed, the more they will be able to benefit from a higher pension. Quarters validated during the career, including periods of unemployment, illness or training, are also taken into account in calculating retirement.

The calculation of the amount of pension at the SMIC also takes into account the income received during the jobs held, taking into account the evolution of the Minimum Interprofessional Growth Wage (SMIC) over time. Thus, a person who has worked at the SMIC throughout their career will have a lower pension than a person who has received a higher salary.

Finally, it is important to note that the amount of retirement at the SMIC may be impacted by the basic pension system and supplementary pension funds. These organizations can offer more advantageous pensions in certain situations, according to their own criteria and rules.

To estimate the amount of your pension based on the SMIC, you can use the retirement simulator made available by service-public.fr. This tool allows you to obtain an accurate estimate of the amount of your retirement pension based on your personal and professional data.

Calculating the amount of retirement

Estimated amount

To estimate the amount of a person's retirement at the SMIC, it is essential to take into account working income, the number of quarters contributed and the retirement age. The amount of retirement depends largely on these factors. A useful tool for getting a retirement estimate is the Service-public.fr simulator, which makes it possible to estimate the amount of basic and supplementary pension at any age.

Point value

The amount of the supplementary pension is calculated according to the value of the point. This value is used to determine the exact amount the retiree will receive. The value of the point may vary depending on the supplementary pension funds and the agreements signed between the social partners.

Pension calculation

The calculation of the retirement pension for a person at the SMIC is carried out using data from Basic Pension Insurance and supplementary pension funds. The amount of the pension depends on several criteria, such as the duration of contribution and income from work. Information provided by the retirement simulator and pension fund data make it possible to obtain an accurate calculation of the retirement pension to be received.

Characteristics of retirement at the SMIC

Basic retirement

The basic pension is calculated based on working income, the number of quarters contributed and the retirement age. For a person with a minimum wage, the basic pension amount will obviously be lower than for someone with a higher salary. However, there is a minimum contributory system to guarantee a minimum pension amount.

Complementary pension

In addition to the basic pension, employees also contribute to a supplementary pension. The amount of this pension depends on several factors, such as the number of points accumulated over the course of a career and the value of the point. Again, a person with the SMIC will contribute less and will therefore receive a smaller supplementary pension.

Full pension

La Full pension is a pension calculated at the maximum rate, i.e. without an allowance. To benefit from it, you must combine a certain number of contributed quarters and have reached the legal retirement age. Full retirement guarantees a higher pension amount, but it is important to note that this does not necessarily mean retiring at the SMIC level.

Minimum contribution

The minimum contributory is a mechanism to guarantee a minimum pension amount for people who have contributed a certain number of quarters (at least 120 quarters). If the basic pension is less than this amount, it is increased to the minimum contributory level. Currently, this minimum is €8,970.87 gross per year.

Factors that affect the amount of retirement

Retirement age

Retirement age is one of the key factors in calculating a person's pension amount at the SMIC. In general, the sooner a person retires, the less amount they will receive. This is due to the fact that the number of quarters contributed will be reduced, and that the duration of insurance will have an impact on the amount of retirement pension.

Insurance term

The term of insurance is the total number of years during which a person contributed to the pension plan. This duration influences the amount of retirement, because the more periods a person has contributed during their working life, the higher the pension amount will be. For people who have contributed to the SMIC, a term of insurance equivalent to the number of quarters required for a full pension guarantees a pension amount corresponding to a percentage of the SMIC.

Number of quarters contributed

The number of quarters contributed represents the number of quarters in which a person contributed to the pension plan. The more quarters contributed, the higher the pension amount will be. Indeed, years of contributions make it possible to increase the duration of insurance, and thus to increase the amount of retirement. For people with the SMIC, it is crucial to have a sufficient number of quarters to benefit from a full pension and thus receive a pension amount corresponding to a percentage of the minimum wage.

Pension reform and impact on the SMIC

The pension reform, which concerns basic pension systems, has brought several significant changes. These measures concerning the retirement age and the duration of insurance concern persons born on or after 1 September 1961.

The SMIC, which is the legal minimum wage in France, has been increased by 0.9% since January 1, 2022. Previously, it had increased by 2.2% on October 1, 2021, due to inflation and the rise in the cost of living. Thus, the gross hourly wage of the SMIC increased from €10.48 to €10.57.

This increase in the SMIC has an impact on the validation of retirement quarters. Indeed, to validate a term, contributors must earn a certain amount based on the SMIC. With the increase in the SMIC, the threshold for validating a quarter is also increasing.

Regarding the amount of a person's retirement at the SMIC, the minimum contributory is a device that makes it possible to increase the basic retirement pension if it is less than a certain amount. If a person has contributed at least 120 quarters, this minimum contribution is €8,970.87 gross per year.

Social security contributions and ceilings

Pension contributions are calculated according to salary and are subject to ceilings set by social security. The amount of these contributions varies according to various factors, and it is important to understand them to better anticipate the amount of your retirement.

In 2023, the annual Social Security ceiling (PASS) is fixed at €43,992, which gives a monthly Social Security ceiling (PMSS) of €3,666. Contributions are therefore calculated on the basis of these amounts, and a retiree who has worked at the SMIC will receive a pension in proportion to his years of contribution and his working income.

The basic pension amount depends mainly on working income, number of quarters and retirement age. It is possible to retire from the legal age, but to benefit from a full pension, calculated at the maximum rate, a certain number of quarters of contributions must be combined.

La calculation formula of retirement from the general social security system is as follows: Pension rate x Average annual earnings for the best 25 years (RAM) x Number of quarters retained/Number of quarters required for your generation. It is therefore important to know the limits of social security well and to follow their evolution in order to anticipate the amount of your pension.

Early retirement for SMIC employees

Early retirement is an option for employees with a long career and who want to retire before the legal age. SMIC employees can also benefit from this possibility, provided they meet certain criteria.

To be eligible for early retirement, you must have started working early and have accumulated a certain number of quarters worked. If the employee started working before 20 and earned five quarters before the end of the calendar year of his 16, 18, 20 or 21 years of age, he could be eligible ¹. Moreover, four quarters are sufficient if the person was born during the last quarter of the year or if they started their career under the employee regime.

The pension amount for SMIC employees depends mainly on three elements: the retirement age, the length of the career and the income received for these jobs. ². Periods of unemployment, sickness or maternity leave, among others, can be taken into account in the form of equivalent quarters.

SMIC employees benefiting from early retirement will be able to receive a pension with an amount proportional to their duration of contribution and their income. It is important to note that, even with early retirement, the pension amount will not necessarily be higher than the SMIC.

In short, early retirement is a possible option for SMIC employees, provided they meet the eligibility conditions in terms of age and duration of contribution. It is essential to fully understand these criteria and to contact the competent organizations to best prepare for retirement.

What is the minimum amount for supplementary pension? The minimum amount of supplementary pension depends on several factors, such as the number of quarters contributed and the income received during a professional career. It is difficult to give a precise amount without taking these elements into account. It is recommended to use a simulator to estimate the amount of supplementary pension according to personal circumstances.

Is the contributory minimum added to retirement? The minimum contribution is a guarantee for people who have contributed at least 120 quarters and receive a basic pension of less than a certain amount. In this case, the basic pension is increased to the level of minimum contributory, which is currently €8,970.87 gross per year. It is not an additional amount that is added to retirement, but rather a guarantee so that the amount received is at least equal to the established minimum.