PENSION INCREASE. Basic retirement pensions will be increased by 4% from August 2022, with retroactive effect from July 1.
[Mis à jour le 15 juillet 2022 à 14h38] The increase in retirement pensions: it’s done! Basic retirement pensions will increase by 4% from August 2022, with retroactive effect to the July, 1st. Indeed, the pension for the month of July being paid on August 9, we will have to wait a few more weeks to benefit from this increase for our seniors. So, how much does this new increase in pensions really represent? The figures put forward by the Prime Minister Elisabeth Borne also include the first increase in pensions, made in January 1, 2022 (1%):
- Pension of 1,200 euros: 45 euro gain (+4%)
- Pension of 1,200 euros: 60 euro gain (+1% and +4%)
Be careful, don’t be fooled if you benefit from a complementary pension (kind Agirc Arrco Where Ircatec). Indeed, these supplementary pensions depend on the social partners and are not subject to the 4% increase. However, they should also benefit from an increase, rather around the November, 1st. As a reminder, the delays in discussions in the Assembly between the various groups concerning the purchasing power bill and the updating of the computer systems managing the payment of pensions could come to stop this well-oiled machine. The first payment of the pension increase could therefore be delayed, and only occur in September 2022. A real blow for the many beneficiaries. This revaluation of retirement pensions aims to restore more purchasing power to our seniors, who have been hit hard by the galloping inflation observed for several months. Indeed, the consumer price index continues to rise month after month, reaching 5.8% in June 2022 over twelve rolling months. More worryingly, average inflation over the whole of 2022 could now exceed the 5.5%. Harming the purses of the most modest.
The successive increases in the amount of retirement pensions (1% in January 2022 and 4% in July 2022) represent a cumulative increase of about 60 euros for a retirement pension equal to €1,200 according to Prime Minister Elisabeth Borne who gave this figure during an interview with France Bleu on June 7, 2022.
Be careful, however, it is not the exact amount that will be displayed on your total pension since it should be remembered that this increase only concerns basic retirement pensions, excluding supplementary ones. However, the average in France for basic pensions is 704 euros according to the statement of the National Pension Insurance Fund, the CNAV. If we take this figure, the 4% gain expected this summer represents an increase of 28 euros per month. For a pension of 1,200 euros, the increase amounts to 45 euros per month.
The 4% increase results from the inflation that has been affecting France for several months. It is therefore an “alignment” with inflation to help combat the loss of purchasing power. However, this decision is a significant development compared to the policy deployed by governments in recent years. For 10 years, retirement pensions were no longer indexed to inflation despite its inclusion in the Social Security Code, resulting in a loss of purchasing power of more than 10% in 10 years according to the orientation council of retreats. This 4% increase should not, however, completely satisfy several pensioner unions who were demanding an increase of at least 4.5%, with retroactive effect from January 1.
The rules for increasing supplementary pensions (Agirc-Arrco, for example) differ from those for basic pensions. These supplementary pensions are calculated from the number of points acquired during the career, to which a value of the point is multiplied. Then, the social partners decide on a possible revaluation of the value of this point.
Generally, these pensions are increased every year on November 1st. In 2021, the value of the Agirc-Arrco point was revalued by 1%. It therefore went from 1.2714 euros to 1.2841 euros. Regarding these supplementary pensions, the Minister of the Economy Bruno the Mayor became clear:It is up to the social partners to upgrade supplementary pensions. We will increase the basic pensions.” So, a little more patience to know the next revaluation of the index point!
The overall retirement pension for civil servants consists mainly of the basic pension. A supplementary scheme, the “additional public service pension (RAFP)” also exists, but is not affected by the revaluation of retirement pensions. The increase in retirement pensions for civil servants should therefore be the same as for other employees.
The increase in pensions is effective from Friday July 1, 2022. De facto, the very first visible increase in retirement pensions will be visible during the first payment, the following month, namely August 9, 2022, a date revealed by Minister of Labor Olivier Dussopt in early June. “We want this indexation to inflation to be valid for pensions in July. Under the general scheme, the pension for July is paid on August 9,” he explained then. A retroactive effect to July 1 should be applied. Please note that the late start of the purchasing power bill due to heated discussions on the subject could delay the payment of this pension increase. For the time being, nothing is certain yet, but the first payment could finally take place during the month of September. A hard blow for the many beneficiaries.