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Increase in pensions: really in July?

Increase in pensions: really in July?

PENSION INCREASE 2022. The government had promised a 4% increase in pensions on July 1. The recomposition of the National Assembly could change everything.

[Mis à jour le 24 juin 2022 à 08h12] And if the increase in retreats didn’t happen on time? The recomposition of the National Assembly following the loss of the absolute majority by the Ensemble group could well hasten things. Everything was well put together, the 4% increase in the basic schemes was to take place from July, and paid from August 9, the date of payment of the July retirement pension. From now on, Emmanuel Macron is obliged to forge alliances to pass the slightest text. This measure, which seemed quite simple on paper, could well become complex and be delayed in its implementation, penalizing the retirees concerned by this revaluation. The law project purchasing power which was to be presented on July 6 and which contained this increase in pensions should be widely contested by the various opposition parties, before finding common ground.

The unions, for their part, are demanding a 4.5% increase with retroactive effect from January 1, 2022. 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 Minister of Labor Olivier Dussopt preferred to speak to him of an increase “45 euros per month”. A calculation that includes the 1% increase on January 1, to which is added this hypothetical 4% revaluation desired by the government. Still, the National Assembly appears more fragmented than ever, and the opposition does not seem in favor of a possible coalition with the head of state, Emmanuel Macron.

The next pension increase will be effective from July 1, 2022, the government has confirmed. 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 announced by the 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.

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 60 euros 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 June 7, 2022. Please note, this is not however 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 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 the Mayor became 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 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.

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