Full-rate pension and pension at the maximum rate of one employee: what difference?
Verified 07 July 2022 - Directorate for Legal and Administrative Information (Prime Minister)
Full-rate and maximum-rate pensions: you've heard about them but don't know exactly what they are? We'll explain the difference.
What is a full rate pension?
A full-rate pension is a pension granted without discount.
As a private sector employee, when you retire, you are entitled to a basic pension from the Social Security Pension Insurance and to a supplementary pension on behalf ofAgirc-Arco: titleContent.
The basic pension of the Social Security Pension Insurance is granted to you at full rate in 2 cases:
- You have a specific number of pension insurance quarters
- You retire at age 67, regardless of the number of quarters of your pension insurance
The number of quarters of pension insurance required to qualify for a full-rate pension varies depending on your year of birth.
Years of birth | Number of insurance quarters |
|---|---|
1955, 1956, 1957 | 166 (41 years 6 months) |
1958, 1959, 1960 | 167 (41 years 9 months) |
1961, 1962, 1963 | 168 (42 years) |
1964, 1965, 1966 | 169 (42 years 3 months) |
1967, 1968, 1969 | 170 (42 years 6 months) |
1970, 1971, 1972 | 171 (42 years 9 months) |
From 1973 | 172 (43 years) |
If you retire before age 67 without the required number of pension insurance quarters, your pension amount is reduced based on the number of pension insurance quarters you are missing.
This reduction is called discount.
For the Agirc-Arco supplementary pension, we are not talking about a full rate pension or a maximum rate pension, but the amount of your supplementary pension may also be reduced or increased depending on your situation.
In particular, the amount of your supplementary pension is reduced if you apply for it before age 67.
What is the effect of the haircut?
The amount of your basic Social Security Pension Insurance pension depends in particular on the average of your gross earnings over your best 25 years.
When the pension is granted at a full rate, 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, the 50% is reduced by 0.625 per missing quarter.
So if you retire before age 67 without having the required number of quarters of pension insurance, the rate that is applied to your average annual gross salary is as follows:
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% |
To determine the number of missing quarters applied to you, Pension Insurance compares 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 according to your year of birth
The number of quarters obtained is rounded up.
The most advantageous number of missing quarters is used.
Example :
If you were born on 1er december 1961, to have a full rate pension, you must either have 168 quarters or wait your 67 years (at 1er December 2028).
If you decide to leave on 1er December 2024, at age 63, with only 162 quarters:
- Between your retirement age and your 67 years of age, you are missing 16 quarters (67 - 63).
- Between your number of quarters at retirement and the number of quarters required for a full rate pension, you are missing 6 quarters (168 - 162)
The most advantageous is chosen, i.e. 6 quarters.
Your pension is calculated based on 46.250% your average gross annual salary.
And the maximum rate of retirement, what is it?
You can have a full rate pension and not have a pension at the maximum possible rate.
The amount of your basic Social Security Pension Insurance pension depends on the average of your gross earnings over your best 25 years.
But it also depends on your number of pension insurance quarters.
Your full-rate retirement pension is calculated as follows:
Average gross annual salary x 50% x your number of pension insurance quarters / the number of pension insurance quarters required to have a full rate pension
Example :
If you were born on 1er december 1961, to have a full-rate pension, you must either have 168 quarters or wait until you are 67.
If you retire between the ages of 62 and 67 with 168 quarters of pension insurance, your full-rate pension is:
Average gross annual salary x 50% x 168 / 168 or Average gross annual salary x 50%
You will have the maximum possible rate.
For example, if your average annual gross salary is €30,000, your annual pension is €15,000 crude (either €1,250 gross per month).
If you retire at age 67 with only 162 quarters, your retirement full rate is equal to:
Average gross annual salary x 50% x 162 / 168
Your retirement is indeed a full rate pension no discount, but you are not collecting the maximum amount possible.
For example, if your average annual gross salary is €30,000, your annual pension is €14,464.29 crude (either €1,205.36 gross per month).
FYI
if you have the necessary number of quarters but spread over different basic schemes, your basic Social Security Pension Insurance pension is calculated based on the number of quarters in that scheme. Your other pensions are too, but you don't have a discount.
How do you know the projected amount of your retirement?
You can create a pension account on the official website Retirement Info.
On your pension account, the service My Retirement Estimate allows you to simulate your retirement amount at different starting ages.
This service offers you 2 ways to get a simulation of your pension amount:
- Or by directly accessing your estimate from data known to your pension funds
- Either by checking your situation and completing it, if necessary
The results indicate, for each starting age, the number of quarters and the possible monthly pension amount.
Amounts shown are gross, but net amounts before tax can be viewed.
For each proposed starting age, you can get the composition of your pension amount: for example, the amount of your basic pension and the amount of your supplementary pension.
You can simulate different starting ages than those proposed.
Once the results are displayed, you can go further in customizing by changing elements of your past situation (for example, periods to complete) or future situation (for example, the evolution of your index processing or a change in your activity rate).