It is common for people to work in more than one country during the course of their career, and they usually end up paying pension contributions in each country. However it is not always clear how these are combined once you reach retirement age.
This is the situation for people who have worked in France and another EU/EEA country or Switzerland. For those who have worked in a non-EU country, click HERE. For Brits, go to the bottom of the article.
If you are an employee in France you will already be paying into your pension, since this is compulsory. If you take a look at your French payslip, among the deductions for social charges is the ‘retraits‘ section and this shows your pension contributions. These can be quite high – OECD data shows that the average French worker pays 11 percent of their monthly (gross) salary into their pension.
In France, because the pension system is “pay-as-you-go”, you are technically eligible for a French pension after just one quarter (trimestre) of working in France under a French contract, though the value of the pension after just one quarter would be quite low.
You can use the French government pension simulator to check the level of your French pension – full details HERE on how that works.
In general, periods of employment outside France may be combined with years worked in France to boost or qualify for the French state pension. However, it depends on which country you have worked in, and whether that country has a social security agreement with France.
All EU, EEA countries, and Switzerland have social security coordination, so will have their pension contributions made in France calculated in the same way as for EU/EEA countries.
The first step is to look at how many EU/EEA countries you have worked in, and to check your retirement eligibility under each of those regimes.
For example, if you worked in both Denmark and in France, then you must consider the minimum age of retirement in both countries. If a person retired at the French legal age of 62, they would receive only the French portion of their pension until they reached Denmark’s legal retirement age (66 to 68), when they would start getting the Danish portion as well.
Then, a calculation is done to determine the pension rate. This will look at the person’s would-be pension under the French scheme (also known as the national pension, or independent benefit). Another calculation will also be done to determine the pension rate under the European community formula (also known as the pro-rata benefit). In most cases the higher value will be the pension applied.
On the European Commission’s website dedicated to explaining old-age pensions across the EU, the European authorities explain how this double calculation is done. Taking the example of the hypothetical person “Rosa” who has worked 20 years in France and 10 years in Spain, the EU site explained how the two European countries would determine who pays what portion of Rosa’s pension.
Starting with France, the first calculation made determines Rosa’s current pension under the French scheme – which is based on Rosa’s 20 years contributing to the French pension system. It is determined that she is entitled to €800 per month.
The next calculation uses the European calculation that offers a theoretical amount – the pension Rosa would receive had she worked the entirety of her career in France.
This theoretical calculation determines that for 30 years working in France, and it determines Rosa would earn a €1,500 pension. To figure out the portion of Rosa’s total pension that France will pay, French authorities multiply Rosa’s would-be total pension (€1,500) by the 20 years worked in France. Then, they divide that by the total years worked in both countries (30 years).
This finds that ultimately France will pay Rosa €1,000 per month as her French pension.
As for the Spanish side, pension authorities will also look at Rosa’s “pro-rata” (or theoretical pension) if she had worked the entirety of her career in Spain. They determine that she would have received a Spanish pension of €1,200 for a full career. Then, Spanish authorities do the same European calculation where they multiply Rosa’s would be total pension (€1,200) by the number of years worked in Spain (10). They divide this number by the total number of years worked (30) to get the portion of Rosa’s total pension that should be paid by Spain.
This determines that Rosa ought to receive €400 of her pension from Spain.
In total, she will receive a pension of €1,400, but €1,000 will be paid by France, and €400 will be paid by Spain.
You can see more examples of these calculations with specific simulations at the Europa.EU website page for State pensions abroad.
You can also watch this video, made by the European Commission, to understand how the process works for EU nationals.
The case for Brits
Brexit has made pensions more complicated for Brits, and essentially divides British workers into two groups.
Those who arrived in France before December 31st 2020 – and are therefore covered by the Withdrawal Agreement – continue to benefit from EU social security co-ordination. They should therefore have their pensions calculated as described above.
Those who moved to France after December 31st 2020 are treated as non-EU nationals for pension calculations – click HERE for a full explanation of the system for non-EU workers.
This article is a general view of the pension system and does not constitute individual financial advice. If you are are unsure about your pension rights, seek independent financial advice.