Self-employed: contribute more to boost your pensions

While Emmanuel Macron had promised during the 2017 presidential campaign a universal French pension system, which would be common to employees and the self-employed in particular, pension reform has recently been delayed once again. Thus, the pension scheme for the self-employed is always different for each of the statuses existing among the self-employed (liberal profession, farmer, artisan-merchant-industrialist), and its system of contributions and pensions is far from being uniform. These differences between the different self-employed workers also exist when the latter wish to boost their retirement pensions by contributing more.

Work more to earn more

Apart from resorting to individual retirement savings, a self-employed person can, in order to obtain a better retirement, decide to work more. He can, for example, work after the legal retirement age and after having obtained the necessary period of retirement insurance, to contribute more quarters, and thus obtain a higher pension. This bonus system can be rewarded differently depending on the status of the self-employed worker.

For artisans, traders and manufacturers, who are attached to the Social Security of the Self-Employed (SSI), each additional quarter worked in relation to the required insurance period increases the amount of their basic pension by 1.25%. The level of increase is the same for farmers, who come under the Mutualité sociale agricole (MSA). For the liberal professions, which are attached to the National Pension Fund for the Liberal Professions (CNAVPL), the bonus is 0.75% per quarter. An additional increase can be obtained by a self-employed worker for his extra quarters of work, if he has contributed during his career to a supplementary scheme which provides for a bonus in this case.

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Overpayment in a higher class

The Interprofessional Provident and Old Age Insurance Fund for the Liberal Professions (Cipav), interprofessional section of the CNAVPL, provides for a specific premium system for its members (osteopaths, psychologists, psychotherapists, surveyors, consulting engineers, etc.). To improve their pensions, these self-employed workers can choose to contribute to the supplementary scheme in the class immediately above that corresponding to their professional income bracket. Concretely, this means that the liberal will have to pay more contributions over the year if he wants to acquire more retirement points, and ultimately obtain a better retirement pension.

To use this additional contribution system in a higher class, the Cipav affiliate must go to his personal space, then to the “Online services” tab where there is the section “Request to contribute in a higher class”. When a request is made, for example in 2021, the Cipav applies it to the final contribution for 2020. The additional contribution is not included in the contribution base which is used to calculate the charges to be paid by the insured. next year, which in a way allows the amount allocated to obtain the premium to be exempted from tax.

The combination of employment and retirement

Total or partial, combining employment and retirement allows retirees from the general scheme to resume a professional activity to add the income obtained to their already established retirement pension. On the other hand, contrary to the systems of traditional premium and premium in higher class, it does not make it possible to acquire new pension rights. It is therefore not a question here of contributing to boost your retirement pension, but of working to obtain additional income during retirement.

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Here again, the combined employment-retirement scheme may differ depending on the status of the self-employed worker. As for the liberal professions, in which one doctor in ten combined employment and retirement according to a study published in 2018 by the DREES (Direction of Research, Studies, Evaluation and Statistics attached to the social ministries), the Cipav aligns itself with the conditions of age and duration of insurance of the general scheme. Other self-employed workers must follow the rules specific to their pension fund. For example, craftsmen, traders and industrialists are subject to a ceiling different from the general scheme for obtaining a partial employment-retirement combination. While farmers can only benefit from full employment-pension accumulation, and never from the partial scheme.

(By the editorial staff of the hREF agency)

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