The pension of a retired senior executive depends on two distinct tiers: the basic pension, capped by Social Security, and the Agirc-Arrco supplementary pension, which represents the bulk of the final pension.
For a complete career in the private sector, the average pension for senior executives ranges from approximately 4,000 to 6,500 euros gross per month, according to available data. This figure masks considerable disparities related to career length, salary level, and retirement choices.
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Social Security Cap and Basic Pension for Senior Executives
The general scheme pays a basic pension calculated based on the average of the 25 best years of salary. For a senior executive, the nuance lies in one word: capping. Only the portion of the salary below the annual Social Security ceiling (PASS) is included in the calculation.
In practical terms, an executive earning two or three times the PASS contributes on their entire salary, but their basic pension only reflects the portion below the cap. Therefore, the maximum pension from the general scheme is around the same amount for all employees with a full career, whether they earn 50,000 or 200,000 euros per year.
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This is why the supplementary pension becomes the real lever for a senior executive’s pension. Without it, the difference with an intermediate executive would be minimal at the time of payment.
To better understand the average pension of senior executives and the mechanisms that determine it, one must examine in detail the functioning of the Agirc-Arrco tiers.
Agirc-Arrco Tiers: Where High Salary Pensions Are Determined
The Agirc-Arrco operates by accumulating supplementary retirement points. Each year, the contributions paid are converted into points based on a purchase price (the reference salary). At the time of retirement, the total number of points is multiplied by the service value of the point to obtain the annual pension.
Senior executives contribute on two tiers:
- Tier 1, which covers salaries up to the PASS, with a uniform contribution rate for all private sector employees.
- Tier 2, which covers salaries between one and eight times the PASS, with a higher contribution rate specific to executives.
It is on Tier 2 that senior executives accumulate the majority of their rights. An annual salary of 120,000 euros generates points over a wide range above the cap, while an executive earning just above the PASS acquires very few points in Tier 2.
The Old Tier C and Its Residual Consequences
Before the Agirc-Arrco merger in 2019, executives whose salary exceeded four times the PASS contributed to a specific Tier C. The points acquired in this tier remain in the calculation of the pensions of current retirees, but the yield of Tier C was significantly lower than that of the other tiers.
Senior executives who retired recently with a long career before 2019 may therefore notice a lower overall yield of their points than expected on the upper part of their remuneration.
Replacement Rate: Why the Pension Decreases When Salary Increases
The replacement rate measures the ratio between the initial pension and the last salary earned. For an employee on the minimum wage or slightly above, this rate often approaches three-quarters of the last net income. For a senior executive, it drops significantly.
Two mechanisms explain this decline:
- The capping of the basic pension, which stops reflecting the actual salary beyond the PASS.
- The decreasing yield of Agirc-Arrco points on the upper tiers, where the ratio between contributions paid and rights acquired is less favorable.
- The complete lack of mandatory coverage beyond eight times the PASS: the portion of salary that exceeds this threshold generates no pension rights.
A senior executive earning 150,000 euros gross annually may thus see their replacement rate fall well below half of their last salary. The higher the salary, the greater the gap between working income and pension.
Removal of the Agirc-Arrco Penalty in 2023: A Direct Gain for Senior Executives
Since 2019, a solidarity coefficient (commonly referred to as “penalty”) reduced the supplementary pension of insured individuals retiring as soon as they reached the full rate by 10% for three years. This measure particularly affected senior executives, for whom the Agirc-Arrco portion constitutes the main component of the pension.
An interprofessional agreement signed in October 2023 has permanently removed this penalty as of December 1, 2023. Senior executives who retire after this date will therefore receive the full amount of their supplementary pension from the first month, without temporary reduction. The bonus granted for deferred retirement has also been eliminated.
This removal represents a significant gain: on a supplementary pension of several thousand euros per month, the 10% penalty reduced the pension by several hundred euros each month for three years. For senior executives who anticipated their retirement considering the penalty, the new rule has changed the calculation of the optimal retirement date.
Incomplete or Mixed Careers: Factors That Affect the Pension
The range of 4,000 to 6,500 euros gross per month assumes a complete career, mostly salaried, and at a high level of remuneration over time. Several common situations significantly reduce this amount.
Senior executives who spent part of their career abroad under local contracts may not have always contributed to the French scheme. The missing quarters result in a reduction in the basic pension and a lower number of Agirc-Arrco points.
Mixed careers (transitioning from salaried employment to self-employment, TNS status, or corporate officer status) fragment rights across multiple schemes. The cumulative pension may be lower than that of an employee who contributed to a single scheme at an equivalent salary because each scheme applies its own calculation and capping rules.
The gap between men and women also persists among senior executives, mainly due to career interruptions and lower average salaries during certain periods.
The retirement of a senior executive is therefore not a single figure. It results from a combination of the structural capping of the base, the yield of supplementary points, and the continuity of the contributed career. Checking one’s Agirc-Arrco point statements and validated quarters remains the first concrete step before any projection of amount.