Reversion rules: effectiveness and implications

Key findings regarding the effectiveness of survivor’s pension rules

• In 2020, amongst those receiving a survivor’s pension, 85 per cent of women and 87 per cent of men were widowed. The remainder (15 per cent of women, 13 per cent of men) had a different legal status: 13 per cent of women (8 per cent of men) were divorced and 2 per cent of women (5 per cent of men) were in a new relationship (married or in a civil partnership). The proportion of divorced women receiving survivor’s benefits has risen significantly across generations.
• Widowed women receive a survivor’s pension in most cases (95 per cent), but widowed men do so less frequently (69 per cent), reflecting a significant level of non-take-up of this benefit. Take-up is also the norm but not universal among divorced women (around 70 per cent), and is in the minority among divorced men (around one-third).
• Take-up of the survivor’s pension is slightly lower at both ends of the income spectrum: it decreases slightly among the wealthiest (both women and men), but also among the poorest men.
• Exits from widowhood are infrequent, and those from the survivor’s pension are even less so: 1.2 per cent of male beneficiaries and 0.6 per cent of female beneficiaries in 2016 were no longer in receipt of the benefit by 2020. These exits are more pronounced at younger ages. In schemes which, in theory, suspend pension payments in the event of remarriage or entering into a new relationship, this suspension does not always appear to be implemented.
• Around one in ten survivor’s pensions is prorated, as the amount is shared with another former spouse who is also a beneficiary. The proportion is higher for divorced people, but the number of people who do not receive their full survivor’s pension remains a minority in all cases: 29 per cent for divorced people, 19 per cent for those who have remarried. In cases where multiple pensions are involved, the pro-rata calculation applied to the survivor’s pension is sometimes inconsistent across the different schemes. Finally, contrary to what the regulations stipulate (in certain schemes) in the event of the death of other former spouses, this pro-rata calculation is very rarely revised upwards.

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Key findings regarding survivor’s pension prospects

• Two-thirds of people are in a relationship (60 per cent are married) at the start of their pensions, in 2020. The proportion of married people is falling steadily over time for both sexes, particularly for men. At the same time, there has been a steady increase in other relationship statuses, both amongst those in a relationship (civil partnerships, cohabiting) and those living alone (divorced, single). Around one in nine newly retired married people are remarried.
• The social gradient is very pronounced amongst men, but significantly less so amongst women. Men with high pensions are much more likely to be in a relationship, and, if they are in a relationship, much more likely to be married.
• Women on low pensions are slightly more likely to be married and slightly less likely to be single.
• Homogamy according to pension level (quintiles) is strong. The majority of pensioners are in a relationship with someone from the same quintile or an adjacent quintile.
• Survivor’s pension rates across all schemes are higher for the 50 per cent of surviving spouses with a lower pension, and lower for the 40 per cent with a higher pension. However, there is a significant disparity in survivor’s pension rates at a given level of the surviving spouse’s pension.
• Differences between women and men emerge, linked to composition effects. Among surviving spouses with low pensions, men receive a higher rate because they are more likely to receive the minimum pension. Among surviving spouses with high pensions, women have a higher rate due to the weight of the Agirc-Arrco component in the deceased spouse’s pension.
• In the majority of cases, the pension per consumption unit (UC) is higher than during the period spent living as a couple, regardless of gender and personal pension level, except for the group of women with very low pensions and those with an intermediate pension level (deciles 7 to 8).

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