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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]

Author

Listed:
  • Frédéric Gannon

    (EDEHN - Equipe d'Economie Le Havre Normandie - ULH - Université Le Havre Normandie - NU - Normandie Université, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Gilles Le Garrec

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Gautier Lenfant
  • Vincent Touzé

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

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.

Suggested Citation

  • Frédéric Gannon & Gilles Le Garrec & Gautier Lenfant & Vincent Touzé, 2021. "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 salar," Post-Print hal-03500168, HAL.
  • Handle: RePEc:hal:journl:hal-03500168
    DOI: 10.3917/ecop1.218.0006
    as

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