Three Pillars of France’s Pension System: Public, Occupational & Private

Knowledge for getting the most from the advinda Premium goFrance Pension & Insurance Package.

Population: 67.2 million

Pension system design

France’s pension system is made up of

  • a basic public first pillar financed on a pay-as-you-go basis,
  • a mandatory occupational system as second compulsory pillar and
  • voluntary occupational and personal arrangements

Private retirement income in France is almost entirely based on the two compulsory pay-as-you-go systems.

Basic public pension

  • basic social system (“régime général”) for all employees in private economy sector; 2011 69.1% of the whole workforce were part of this system
  • compulsory basic social security system which provides earnings-related benefits for employees in the private sector
  • maximum pension payment rate: 50% of average income
  • pension payment depends on: average yearly income, pension rate (depends on number of semesters being insured, min. 37.5%, max. 50%) and period of insurance
  • low-income earners with residence in France receive minimum pension from age 65 (60 at invalidity or occupational disability): 7,555.50 € p.a. or 629.62 € per month in 2017

The required number of years to qualify for a full pension is currently 41 years. The general retirement age is 62 for people born after 1.1.1955. Age groups before July 1951 could retire at the age of 60. In general, full pension is being paid at the age of 67. Employees who started their occupational life early can retire at the age of 60 providing that they fulfilled the necessary number of contribution years.

Occupational pensions

  • all employees have to be – in addition to the basic public pension – also members of compulsory supplementary plans
    • compulsory occupational pension schemes (AGIRC and ARRCO): based on collective agreements for different occupational groups (many single systems, no possibility of free choice)
      1. cover all employees in free industry, divided into normal employees and executive employees
      2. financed according to pay-as-you-go systems based on employer and employee contributions
      3. returns depend on number of pension points received during an employee’s working life and the age of entry into retirement
    • Voluntary occupational pension schemes: company savings plans as a tax-efficient savings product for employees with option of an additional employer contribution.
      1. insured pension plans
      2. Long-term Company Savings Plans (PERCO): “plan d’épargne retraite collectif”, a defined-contribution pension savings scheme that allows beneficiaries to build up a lump sum or an annuity which is locked in until retirement.
  • voluntary occupational pension schemes only a small part of the market

Private pensions

Private pension investments equivalent to: 8.7% of GDP (2015)

Private pension assets 2015: $ 212,254.3 million USD (all forms of private investment with a value associated to a pension plan over which ownership rights are enforced by institutional units, individually or collectively. This indicator is measured in millions of USD; source: OECD)

Pension funds’ assets 2015: $ 13,261.9 million USD (assets bought with the contributions to a pension plan for the exclusive purpose of financing pension plan benefits. The pension fund is a pool of assets forming an independent legal entity. This indicator is measured in millions of USD; source: OECD)

Net pension replacement rate 2014: 67.7% (individual net pension entitlement divided by net pre-retirement earnings; measures how effectively a pension system provides a retirement income to replace earnings. This indicator is measured in percentage of pre-retirement earnings by gender; source: OECD)


French embassy –

The Organisation for Economic Co-operation and Development (OECD) –