Retirement: What percentage of your old salary will reach your pension?

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Depending on your career path and your pension plan, the amount of your pension will be more or less low compared to the salary you received at the end of your career.

While some people eagerly await their retirement, it is generally accompanied from loss of income. In principle, your retirement pension is indeed lower than the last gross salary paid by your last employer. A more or less significant reduction, which depends on the career you have had, but also on the pension scheme to which you are affiliated. In its annual report published in June, the Retirement Guidance Council (Cor) describes typical cases which allow you to estimate the level of your replacement ratethat is, the percentage of your last earned income that you will keep once you retire.

To facilitate comparisons between typical cases, Capital is based on the replacement rates at full retirement age (without reduction) detailed by the Cor. Please note that while the replacement rates presented allow for a comparison of typical cases under public and private schemes, “the indications must be considered with caution”warns the Cor. These examples cannot be “considered representative of insured persons belonging to the same category”.

A bigger drop in income for executives

First observation: as a general rule, “replacement rates are higher when salaries are low”underlines the Cor. Thus the full-rate retirement pension of an executive aged 62 years and 6 months at the time of his departure represents on average only 52.9% of his last salary received. Conversely, the full-rate pension of a non-executive retiree who left at 61 years and 3 months represents on average 76.1% of his last salary. Such a gap is explained precisely by the fact that retired executives are, on paper, better paid than retirees who have not held a management position during their career.

The replacement rate is also logically more significant for women. The Cor report cites the typical case of a woman who had two children and was 62 years and 6 months old when she retired at full rate. The amount of her pension is 80.4% of the last salary received. This is also explained by supposedly lower remuneration linked to salary inequalities between men and women or by periods of part-time work during the career.

Significant differences among civil servants who received bonuses

Civil servants are not all treated the same. Logically, those from category B should benefit from a higher replacement rate than those from category A. The former are generally paid less than the latter during their career. Thus, a sedentary category B civil servant aged 62 years and 6 months who retires at full rate receives a pension which amounts on average to 62.9% of his last salary.

The replacement rate is significantly lower for a category A civil servant who has received many bonuses during his career. By retiring at full rate at age 64, the latter receives a pension that represents, on average, 47.8% of his last salary. But the low rate is mainly explained by the volume of bonuses received by the civil servant. These are not taken into account in the calculation of the pension. In other words, a category A civil servant who has received few bonuses during his career can hope for a much higher replacement rate. On average 75.4% for a full-rate retirement at age 64 according to the Cor.