Employment law
Pensions: INPS allowances and pensions
Same week, same human resources office at Kayes Ciment. Seydou, 53, wants to leave with eight years of contributions. Moussa’s widow, whose husband died at 41 after eleven years of contributions, is waiting for answers. Salif, 58, is preparing his farewell party. Three files, three different benefits: using the wrong word means getting the wrong amount.
Kayes Ciment and the people mentioned in this article are fictitious: they are used as examples only.
1. What exactly are we talking about?
Kayes Ciment employs 210 people. Like every company subject to the Labour Code, it contributes on their behalf to the old-age, disability and death insurance scheme managed by the National Social Security Institute (INPS) (Social Security Code, article 1 and article 3).
This scheme pays two families of benefits. A pension is a benefit paid every month to an insured person who meets the insurance-period conditions, or to their survivors. An allowance is the benefit provided when those conditions are not met. The Code recognises two: the old-age allowance, which the INPS and the Labour Code call the solidarity allowance, and the survivor’s allowance.
| Benefit | Main condition | Payment | Passed on to survivors |
|---|---|---|---|
| Retirement pension | 13 years of insurance (article 143) | Every month (article 158) | Yes (article 152) |
| Disability pension | 8 years of insurance and disability (article 148) | Every month, until age 53 (article 150) | Yes (article 152) |
| Old-age allowance | At least 6 years of insurance, age 53, stopping all salaried work (article 147) | Flat amount | Not provided for |
| Survivor’s allowance | Death of the insured person with less than 13 years of insurance (article 154) | Once | Not applicable |
Why two families? The scheme aims to reward the length of contributions: a full career opens a pension, a short career opens at least an allowance.
The most common mistake
Talking about a “disability allowance”. The Code does not provide for this benefit: non-occupational disability opens a pension, provided there are eight years of insurance. Below that, nothing is due for disability.
A pension is earned through length of service. An allowance catches careers that are too short.
2. First difference: the amount
The pension follows salary and insurance period: it amounts to 26% of the average monthly remuneration over the last eight years for 156 months of insurance (Social Security Code, article 156). The old-age allowance, however, is flat-rate: a fixed amount, equal to the minimum pension, whatever the salary (Social Security Code, article 147).
Example. Seydou, 53, has eight years of insurance and an average monthly remuneration of XOF 250,000. The SMIG is XOF 40,000.
If he leaves now, old-age allowance: 40,000 × 2 × 26% = XOF 20,800 per month
If he stays until 58 and reaches 13 years of insurance, pension: 250,000 × 26% = XOF 65,000 per month
Difference: 65,000 − 20,800 = XOF 44,200 per month
The higher the salary, the wider the gap: the allowance is the same for a manager and for a labourer. Details in our article Old-age allowance.
What you need to do
- Check the exact insurance period on the INPS statement before giving any advice on leaving.
- Calculate in writing the possible allowance and pension, and give this calculation to the employee.
- Remind the employee that the old-age allowance does not depend on their salary.
3. Second difference: what is left for the family
On the death of the holder of a retirement, disability or early pension, the survivors are entitled to a survivor’s pension (Social Security Code, article 152). This is reversion: part of the pension passes to the spouse and children. It amounts to 50% for the widow or widower and 10% per orphan, with the orphans’ total not exceeding 50% (Social Security Code, article 157).
Example. Salif retires with a pension of XOF 100,000 per month. If he dies leaving a widow and three dependent children:
Widow: 100,000 × 50% = XOF 50,000 per month
Orphans: 3 × (100,000 × 10%) = XOF 30,000 per month, below the XOF 50,000 ceiling
Total paid to the family: 50,000 + 30,000 = XOF 80,000 per month
The old-age allowance is not on the list in article 152. If Seydou leaves with his allowance and dies, his family will not receive a survivor’s pension on that basis. This is what is called a non-reversible benefit.
The case of Moussa’s widow
Moussa died while still working, with eleven years of insurance. He did not meet the conditions for a pension: his family receives the survivor’s allowance, paid once (article 154). See our article Survivor’s allowance.
A pension outlives its holder. An old-age allowance ends with them.
4. Third difference: the payment rhythm
Retirement pensions are paid every month, in arrears, meaning at the end of the month concerned (Social Security Code, article 158). They can be assigned and seized under the same conditions and limits as wages (article 159). The holder of a retirement or disability pension keeps family allowances as of right (article 156).
The survivor’s allowance, by contrast, is a lump sum paid once. In all cases, the claim for payment of benefits is time-barred after two years from the first day of the quarter following the one to which they relate (article 166). The limitation period is the loss of the right to act once the time limit has passed.
What a late file costs
For the pension, delay also costs months of payments: it takes effect on the first day of the month following the end of work if the application reaches the INPS within six months, and only on the first day of the month following its receipt after that (article 146).
Example. Salif stops working on 30 June and his pension is XOF 100,000. His application only reaches the INPS on 15 March of the following year, more than six months later.
Start date with an application within six months: 1 July
Start date with the late application: 1 April
Months lost: July to March, i.e. 9 months
Loss: 9 × 100,000 = XOF 900,000
What you need to do
- Send the pension application to the INPS well before the six-month period following departure expires.
- Tell the family of a deceased employee about the two-year time limit for claiming benefits.
- Keep a dated copy of every file sent to the INPS.
5. A closer look: the employer’s role in the file
The pension application may be sent to the INPS by the person concerned or by their last employer, who forwards it within a period not exceeding six months. It must be accompanied by proof that work has stopped and an undertaking not to resume salaried activity (Social Security Code, article 155).
On departure, the employer pays the retirement payment, calculated like severance pay, to the employee who permanently stops working to start receiving their retirement pension or the solidarity allowance (Labour Code, article L.55).
Key takeaways in 5 points
- Distinguish the pension, linked to a sufficient insurance period, from the allowance, provided for shorter careers.
- Remember that the Code recognises only two allowances: the old-age allowance and the survivor’s allowance.
- Calculate the gap between the old-age allowance, which is fixed, and the pension, which is proportional to salary, before any departure.
- Warn employees that the old-age allowance does not pass to their survivors.
- File applications on time: six months so as not to lose months of pension, two years so as not to lose the right.