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Human Resources

Contractual breakdown and retirement: modification of employer contribution

Publié le 17 août 2023 - Mise à jour le 20 septembre 2023 - Directorate for Legal and Administrative Information (Prime Minister)

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As part of the pension reform, the contributions paid by the employer on allowances paid in connection with a contractual breakdown and retirement have been unified since 1^er September 2023. The rate of that single contribution shall be 30 % of the compensation paid.

The 2023 Social Security Amending Financing Act unifies the social scheme of conventional severance and retirement benefits. The aim of this reform is to increase the cost of contractual breaks in DTAs in order to protect employees who are close to retirement from potential redundancy.

Thus, to 1^er september 2023shall apply to employers a fixed single contribution to 30% the compensation paid. This does not take into account whether or not the employee is entitled to a retirement pension.

This single contribution, set up for the benefit of the National Old-Age Insurance Fund, replaces:

the social flat-rate fixed at 20% of the amount of the contractual severance allowance (it applied only to employees who were not entitled to a retirement pension)
and the employer's contribution of 50 % of the allowance paid for the employee's retirement.

Tableau - Summary table
	Rate applied until August 31, 2023 on the compensation paid	Rate applied to 1^er september 2023 on compensation paid
Social security scheme for contractual severance pay	20 % (social lump sum, applies to employees who are not entitled to a retirement pension)	30 % (single contribution, applies for all employees)
Employer's contribution on allowances paid in the event of an employee's retirement	50 % (employers' contribution)	30 % (single contribution)

Please note

This employer contribution must be declared via the CTP 719.

LAW No. 2023-270 of 14 April 2023 amending financing of social security for 2023

Contractual breakdown and retirement: modification of employer contribution

Cet article est ancien

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