Retirement of the employee: what is the discount?
Verified 01 September 2023 - Legal and Administrative Information Directorate (Prime Minister)
The haircut is a reduction that is applied to the amount of your retirement pension when you retire without entitlement to a retirement full rate.
To understand what a full rate pension is, as a private sector employee, when you retire you are entitled to:
- To a retirement pension from the Social Security Pension Insurance (referred to as basic pension)
- And a state pensionAgirc-Arco: titleContent (said supplementary pension).
Your basic retirement pension from Pension Insurance is granted to you at a full rate mainly in one of the following 2 cases:
- You're retiring before age 67 by having a sufficient number of quarters pension insurance (this number varies according to your date of birth)
- You're retiring at age 67, regardless of how many quarters of pension insurance you have
FYI
If you worked under other statuses than as an employee (public official, self-employed, etc.) and consequently contributed to several pension funds, this is your total insurance duration, all schemes combined, which is taken into account in determining whether or not you are entitled to full-rate retirement pensions.
If you retire before age 67, you are entitled to a full rate pension if you meet the following conditions:
You were born: | You can retire from: | Number of quarters required to have the full rate |
|---|---|---|
In 1956 or 1957 | 62 yrs | 166 (41 years 6 months) |
Between 1er January 1958 and December 31, 1960 | 62 yrs | 167 (41 years 9 months) |
Between 1er January 1961 and August 31, 1961 | 62 yrs | 168 (42 years) |
Between 1er September 1961 and December 31, 1961 | 62 years and 3 months | 169 (42 years 3 months) |
1962 | 62 years and 6 months | 169 (42 years 3 months) |
1963 | 62 years and 9 months | 170 (42 years 6 months) |
1964 | 63 yrs | 171 (42 years 9 months) |
1965 | 63 years and 3 months | 172 (43 years) |
1966 | 63 years and 6 months | 172 (43 years) |
1967 | 63 years and 9 months | 172 (43 years) |
From 1er january 1968 | 64 yrs | 172 (43 years) |
If you retire before age 67 without having the required number of quarters, you are not entitled to a full rate pension.
In this case, the amount of your retirement pension is reduced according to the number of quarters you are missing.
This reduction is the discount.
If you retire at age 67, you are entitled to a full pension rate, regardless of the number of quarters of pension insurance.
Your pension is calculated based on the number of quarters you have, whatever it is.
If you have fewer quarters than you need to qualify for a full-rate pension before age 67, no discount is applied to you.
FYI
You may be entitled to a full-rate, no-discount, basic pension from Pension Insurance before age 67 in some special situations (for long career, disability, disability, etc.).
The amount of your Arco-Agric Supplementary Retirement may also be reduced or increased depending on your age of departure.
The number of missing quarters retained by Pension Insurance is smaller of the following 2 numbers:
- Number of missing quarters between your retirement age and 67 years of age
- Number of quarters missing between your number of quarters at retirement date and the number of quarters required to qualify for a full rate pension
The number of quarters obtained is rounded up.
The maximum number of missing quarters taken into account is limited to 20.
Example :
You were born on the 1ster July 1962. You can retire from age 62 and 6 months. To be eligible for a full rate pension, you must either have 169 quarters or wait for your 67th birthday (at 1er July 2029).
If you decide to leave on 1er july 2025, at age 63, with only 161 quarters
- You will be missing 16 quarters between your retirement age and 67 (number of quarters between 67 and 63)
- You will miss 8 quarters between your number of quarters at retirement date and the number of quarters required to qualify for a full rate pension (169 - 161)
That's the best number, eight quarters.
The amount of your basic retirement pension from Pension Insurance depends in particular on the average of your gross wages over your best 25 years.
When you are entitled to a full rate pension, your retirement pension is calculated on the basis of 50% of this average annual gross salary.
However, if you retire before age 67 without having the required number of pension insurance quarters, this rate of 50% is reduced by 0.625 per missing quarter.
So, if you retire before age 67 without having the required number of pension insurance quarters, the rate that is applied to your average annual gross salary, called a discount, is as follows:
Number of missing quarters | Retirement rate |
|---|---|
1 | 49.375% |
2 | 48.750% |
3 | 48.125% |
4 | 47.500% |
5 | 46.875% |
6 | 46.250% |
7 | 45.625% |
8 | 45,000% |
9 | 44.375% |
10 | 43.750% |
11 | 43.125% |
12 | 42.500% |
13 | 41.875% |
14 | 41.250% |
15 | 40.625% |
16 | 40,000% |
17 | 39.375% |
18 | 38.750% |
19 | 38.125% |
20+ | 37.500% |
Example :
Let's go back to the previous example: you were born on the 1er July 1962. You decide to retire at age 63 on 1er July 2025 by having only 161 quarters instead of the 169 required to qualify for a full rate pension. The number of missing quarters used is 8.
Your pension will be equal to: Average gross annual salary x 45% x 161 / 169
You can find out how many quarters of pension insurance you have by consulting your career record in your pension account, available on the official pension info website.
Your career statement summarizes, in a chronological manner, all your different professional periods.
You can print and download your career record.
You can also perform a simulation the amount of your pension at different ages, full or not, based on the data known to your pension funds.
From the age of 55 onwards, you can report to your pension funds the anomalies in your career statement and ask for their correction: missing jobs, inconsistencies, etc.
Your pension funds are directly informed.
You can then follow their treatment on your pension account:
Who can help me?
Find who can answer your questions in your region
Pension insurance - 39 60
To inform you about your situation, ask a question about your file, access personal information (follow-up of the file, latest payments, etc.).
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39,60 (or 09 71 10 39 60 from a mobile, a box or the foreigner)
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Public interest grouping "Union retirement"
National old-age insurance fund