The umbrella company system was originally intended for seniors. This scheme allows them to work as independents through an umbrella company. But how can you work in umbrella company employment in retirement an umbrella company after retirement? Can you combine income from umbrella company employment with a full-rate pension? Does this combination affect the amount of the supplementary pension?
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Here are the terms for combining work and retirement in umbrella company employment, the advantages of this system and its drawbacks for retired consultants.
Can you combine a pension and umbrella company employment?
The umbrella company system involves the signing of an contract between an umbrella company and an employeeemployment contract. This contract can be signed by a retiree who has chosen to combine work and retirement, subject to several conditions.
Combining umbrella employment with a full-rate pension
It is possible to work in an umbrella company employment during retirementumbrella company. The rules for combining work and retirement changed with the 2023 amended social security financing law (i.e., the pension reform). They vary according to:
- the type of professional activity,
- the retiree's year of birth,
- their retirement age at retirement,
- the rate of their pension.
Do you receive a full-rate pension? The conditions for combining work and retirement are simple. To combine umbrella company employment and a full-rate pension, you must:
- having claimed all your pensions from your pension insurance fund,
- having claimed the pensions corresponding to your Agirc-Arrco supplementary pension points,
- declare your combined employment and umbrella-company work to the Retirement and Occupational Health Insurance Fund (Carsat).
The declaration of combined work and retirement to the Carsat must be made no later than one month after signing the umbrella company employment contract. From your first salary you pay contributions to the pension fund. Your pension will be recalculated, and you will receive a new pension in addition to your retirement benefit. Its annual ceiling is set at €2,199.60.
Umbrella employment during a reduced-rate pension
Second scenario: you have not accumulated the number of quarters required to qualify for a full-rate pension. You can sign an employment contract with a portage salarial company without losing your entitlement to a pension. Conditions apply to this status.
Declare your combined activity to your Retirement and Occupational Health Insurance Fund within the month following the signing of the contract with the portage salarial company.
Then report any change in your income to that fund. With a reduced-rate pension, the total amount you receive (your salary and your pensions) is subject to a ceiling: €2,734.85 gross per month, or your last salary before retirement. If you exceed this ceiling because your retired consultant income is high, your pension is reduced. This ceiling does not apply to certain professional activities, including artistic activity.
When you work in portage salarial during retirement without receiving a full-rate pension, the amount of your retirement does not increase.
General rules for umbrella employment during retirement
Whatever your pension rights (full rate or reduced rate), you must follow rules to benefit from the status of retired portage salarial employee. These are the same as for all employees in portage salarial, that is:
- find each contract yourself,
- aim for a minimum monthly income (between 70% and 85% of the social security ceiling),
- have at least 3 years' experience in the sector (or a two-year degree).
Warning: if you sign a contract with your usual portage company (the one you had before retiring), you must wait 6 months before resuming your professional activity. At full rate, this rule applies only if your retirement takes place after October 15, 2023. At reduced rate, it applies to all retired employees in portage salarial.
What are the advantages of umbrella employment for a retiree?
For a senior consultant, portage salarial is a system that complements their retirement pension. This status also allows you to diversify professional experiences.
An additional source of income
Among the advantages of umbrella-company employment in retirement, the first is the supplementary income generated. A contract as a consultant allows you to receive a salary from the portage company.
As a retired consultant, you are free to combine:
- your self-employed income,
- your pension paid by Assurance Retraite (or the National Old-Age Insurance Fund),
- your Agirc-Arrco supplementary pension based on points.
A new calculation of the full-rate pension
The combining retirement and umbrella employment triggers a new calculation of your pension rights. The amount of your pension remains the same as before, but you accrue new rights when you receive your employee income through umbrella-company employment. This benefit applies only to retirees with a full pension rate. The increase in your pension is offset by the payment of contributions on your retired salary earned through umbrella-company employment.
You are not entitled to a full-rate retirement pension? Umbrella-company employment does not increase your pension, but it helps you maintain your standard of living after the year you retired. It allows you to earn a significant annual salary and enjoy your retirement years more.
In any case (full rate or reduced rate), you are supported administratively by your umbrella company. Most umbrella companies are used to assisting retired consultants. Before choosing an umbrella company, ask what proportion of its consultants are retired independents.
The continuation of a fulfilling professional life
Regarding your professional development and personal life, umbrella-company employment in retirement is rewarding: with each contract, you work with a new company. Whatever your age, you gain new experiences through umbrella-company employment.
A job through an umbrella company in retirement is an opportunity to share, with other employees, the skills you acquired during your years of professional experience. In many sectors, the umbrella arrangement allows you to work as a consultant or trainer. This status is ideal for maintaining a professional, intellectual and social activity.
What are the limitations of umbrella employment for a retiree?
The umbrella company employment in retirement has few drawbacks. Nevertheless, for retired independents and consultants, several points should be taken into account.
A cap on the pension
The status of a retired umbrella-company employee requires providing supporting documents to the Pension insurance fund and to occupational health services. To simplify the formalities, the umbrella company can provide advice to the consultant.
Another point to consider before combining retirement and umbrella employment: the cap on the supplementary retirement pension for full-rate retirees. Whatever the income of the retired employee in umbrella employment, the amount of their supplementary pension is capped at €2,199.60 per year.
Without a full-rate pension, no new pension recalculation
The combining umbrella company employment and pension can sometimes be disadvantageous for retirees who cannot receive a full-rate pension. Their pensions are not revalued when they work after retiring. They keep the same amount.
As a reminder, since the 2023 pension reform, you must meet one of these conditions to receive a full-rate pension:
- having accumulated the number of quarters required by law,
- or retire at 67 (if you were unable to validate your quarters).
The required number of quarters depends on your year of birth. It is calculated by adding periods of work and compensated unemployment. Following the pension reform, retirees born in 1965 (or later) will pay contributions for 172 quarters to the National Old-Age Insurance Fund. These 43 years of contributions entitle you to a full-rate pension. For retirees born before 1965, the number of quarters to validate ranges from 166 quarters (41 years) to 171 quarters (42 years).
It is possible to retire from the age of:
- 62 years for employees born between 1956 and 1961,
- 62 to 63 years for employees born between 1962 and 1967,
- 64 years for employees born from 1968 onwards.
However, without the years of contributions required by law, the employee cannot receive a full-rate pension before age 67. Working as an umbrella company employee is then less attractive, since this scheme does not open up new pension rights for retirees with a reduced rate.
Employee, do you want to retire without validating 172 quarters of work and unemployment? Contact the Agirc-Arrco supplementary pension scheme. You will learn the number of points earned during your career and the rate you will receive when you retire. You can combine your income from umbrella company employment with your pensions from both schemes: the state pension and the points-based supplementary pension.
Our tip for working through an umbrella company in retirement
Combine umbrella company employment and pension, it’s possible. Sign an employment contract with an umbrella company and become an employee while receiving your pension and your points-based supplementary pension.
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