Each country has its own pension model, so both the way of calculating the amount, the retirement age and the years of contributions vary between them. That is to say, the pension in the United States is not the same as in Spain or France. Now, it is always said that pensions in Northern Europe are better, but is this really true? Alfonso Muñoz Cuenca, a Social Security official, has explained how pensions in Spain and France differ, and why French retirees earn more on average than Spanish retirees.
Alfonso explains that both countries use a pay-as-you-go system, that is, the contributions of active workers are used to pay current pensions. Now, the French system has a peculiarity, and that is that it has a more complex structure, incorporating a mixed model based on points and contributory contributions, which allows for a more flexible calculation of the final amount of the pension.
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A higher average pension in France
One of the points that most draws attention, according to Muñoz, is the difference in the average pension. In this sense, while in Spain the average pension is around 1,311 euros per month, in France it exceeds 1,600 euros. According to the Social Security official, this difference is due to the fact that in France salaries are higher, to which we must add that it has a mandatory complementary pension system and that their working careers are longer in terms of contributions.
In France, to access the full or 100% pension it is necessary to have more contributions than in Spain. To understand it, those born after 1965 need 172 quarters of contributions (43 years) to collect that 100% of the pension, while in Spain, it is necessary to have 36 years and 6 months of contributions (which will rise to 37 in 2027) as established by Law 27/2011.
Two reforms with different approaches
Muñoz also explains that the pension reforms applied have sought to make this system a more sustainable and less stressed model, due to the increase in average age.
- Spain, the second pension reform (under Royal Decree 2/2023) opted to increase income, introducing additional contributions such as Intergenerational Equity Mechanism (MEI) or the new progressive unstopping of the maximum bases.
- France, for its part, has decided to delay the legal retirement age, a very controversial measure promoted by Emmanuel Macron’s government that progressively raises the retirement age to 64 years before 2030 (remember that in Spain it will reach 67 years in 2027).
Both strategies seek the same objective, which is to maintain the economic balance of the public pension system in the face of the increase in the number of retirees and the reduction in the number of contributors.
A simpler system versus a more flexible one
The Social Security official explains that the Spanish model is “more predictable and homogeneous”, since the calculation of the pension is based on the contribution bases and the years worked. On the contrary, the French system, although more complex, offers greater flexibility through accumulated points, which are later translated into pension rights.
This implies that two workers with the same salary and professional career may have different pensions, depending on how they have contributed to the different regimes (general or complementary).
Both seek to guarantee decent and sustainable pensions
To conclude, Alfonso Muñoz Cuenca remembers that neither the French nor the Spanish system is perfect. Both share the same demographic challenge and depend on the evolution of employment and wages to remain viable.
“The sustainability of the system depends on maintaining a balance between what is contributed and what is received,” says the official. In that sense, while France is committed to working longer and Spain is committed to contributing more, the final objective is the same: ensuring sufficient pensions for future generations.