PENSION INCREASE 2022. This Friday, July 1, retirement pensions are increased to take inflation into account. What gain? For who ? Complementary, civil servants… We take stock.
[Mis à jour le 1er juillet 2022 à 08h18] D-Day has arrived! The retirement pensions of our seniors are increasing this Friday, July 1, 2022 by 4% to take into account galloping inflation. Please note that this increase will not fully offset the rise in consumer prices (+5.8% in June year-on-year), notably due to soaring food and energy prices. Also keep in mind that only pensions from the basic scheme are affected. Supplementary pensions do not benefit from this exceptional increase. Everything will depend on the social partners and their appetite for a potential increase, from November 1st.
The various unions demanded a 4.5% increase in retirement pensions with retroactive effect from January 1, 2022. Note that the increase decided by the government represents an average increase of 45 euros per month for a pension of 1,200 euros, as announced by the Minister of Labor Olivier Dussopt. Keep in mind that from now on, alliances will have to be forged by Emmanuel Macron to try to pass any text since the loss of the absolute majority in the Assembly after the last legislative elections. The opposition is already organized, and in particular the Nupes with an imminent proposal on purchasing power, in particular concerning the minimum wage and energy prices.
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. However, this 4% increase should not completely satisfy several pensioner unions who were demanding an increase of at least 4.5%, with retroactive effect from January 1.
Adding to the increase of just over 1% in January, the total increase in pensions in 2022 is therefore 5%. This represents a gain of approximately 60 euros (1% + 4%) for a retirement pension equal to 1,200 euros according to Prime Minister Elisabeth Borne who gave this figure during an interview with France Bleu on 7 June 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.
The overall retirement pension for civil servants consists mainly of the basic pension. A supplementary scheme, the “additional public service pension (RAFP)”, concerns 20% of the amount of the annual gross index salary, at most. De facto, the increase in pensions on July 1, 2022 should be greater for civil servants than for other pensioners.
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 Le Maire was 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 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.