Private Sector Employee Pensions and the Transition to a Universal Point-Based Pension System: Impact Study on Typical Full-Career Trajectories under the Social Security Ceiling

Pension d’un salarié du secteur privé et transitions vers un système universel de retraite par points: étude d’impact sur des profils-types de carrière complète sous plafond

Frédéric Gannon, Gilles Le Garrec (), Gautier Lenfant () and Vincent Touzé
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Gilles Le Garrec: OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po

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Abstract: The introduction of a universal point-based system modifies the link between labour income and pension benefits. In this paper, we show that for private-sector workers with full careers whose earnings fall below the social security contribution ceiling, the new system effects a redistribution in favour of the lowest-wage trajectories; immediate conversion of pension rights acquired under the previous system into points is also more advantageous for low-wage trajectories than under the multiple calculation rules of earlier schemes; careers with low-contribution years can be expected to incur significant declines in benefits; and for low-wage careers, subsequent increases in the minimum pension may in some cases lead to a higher perceived effective pension.

Keywords: Pension reform; Wage trajectories; Minimum pension; Réforme des retraites; Profils de carrière salariale; Pension minimum (search for similar items in EconPapers)
Date: 2021-12-06
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Published in Economie et Prévision, 2021, 1 (218), pp.1-22. ⟨10.3917/ecop1.218.0006⟩

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Working Paper: Private Sector Employee Pensions and the Transition to a Universal Point-Based Pension System: Impact Study on Typical Full-Career Trajectories under the Social Security Ceiling (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03500168

DOI: 10.3917/ecop1.218.0006

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