Private Sector Employee Pensions and the Transition to a Universal Point-Based Pension System: Impact Study on Typical Full-Career Trajectories under the Social Security Ceiling[Pension d’un salarié du secteur privé et transitions vers un système universel de retraite par points : étude d’impact sur des profils-types de carrière complète sous plafond]

The introduction of a universal point-based system modifies the link between labour income and pension benefits. In this paper, we show that for private-sector workers with full careers whose earnings fall below the social security contribution ceiling, the new system effects a redistribution in favour of the lowest-wage trajectories; immediate conversion of pension rights acquired under the previous system into points is also more advantageous for low-wage trajectories than under the multiple calculation rules of earlier schemes; careers with low-contribution years can be expected to incur significant declines in benefits; and for low-wage careers, subsequent increases in the minimum pension may in some cases lead to a higher perceived effective pension.