Early retirement due to corporate restructuring

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Businesses encountering financial difficulties or structural problems may, subject to certain conditions, resort to early retirement due to corporate restructuring (préretraite-ajustement), thereby avoiding redundancies and reducing their wage bill and hence their fixed costs.

Early retirement (préretraite) is not to be confused with an early old-age pension (pension de vieillesse anticipée). The latter falls within the framework of pension insurance, whereas early retirement, which is limited to a period of 3 years, is a means of preventing unemployment. Early retirement is therefore considered as insurance years that count toward the old-age pension.

Who is concerned?

The following may apply for approval to implement early retirement due to corporate restructuring:

  • employers, in the event of:
    • closure of the business;
    • restructuring leading to job losses; or
    • job transformations further to technological changes; or
    • a lengthy restructuring process aimed at changing the age profile within the business by taking on new recruits and allowing older employees to take early retirement.
  • trustees of businesses which have been declared bankrupt;
  • internal auditors of businesses which have been placed under controlled management;
  • liquidators of businesses undergoing compulsory liquidation.


Conditions for the business

The business must seek to come to an agreement with the Minister for Employment.

Agreements on early retirement due to corporate restructuring are generally for a period of one year.

However, for businesses which have entered into a job protection plan or redundancy plan, the duration of validity of the individual early retirement agreement may be equal to the period of validity of that plan.

Conditions for the employee

To qualify for early retirement due to corporate restructuring, the employee must:

  • be at least 57 years of age;
  • have been employed in the business in question for at least 5 years. If the business has been declared bankrupt or placed in compulsory liquidation, the minimum number of years of employment in the business is reduced to one year;
  • be eligible to receive an old-age pension, or an early old-age pension, no later than 3 years after taking early retirement;


An employer applying for approval to implement early retirement due to corporate restructuring is required to file the application with the Minister for Employment no later than 15 days before the meeting of the Economic Committee (Comité de conjoncture).

How to proceed

Filing an application

Businesses wishing to implement early retirement due to corporate restructuring must send:

  • an application for early retirement due to corporate restructuring on plain paper to the Ministry of Labour;
  • a copy of the application to the secretariat of the Economic Committee.

The following information must also be provided in the application:

  • a detailed description of the business's situation, justifying the implementation of early retirement due to corporate restructuring as a solution;
  • a copy of the existing job protection plan, where applicable;
  • a copy of the existing redundancy plan, where applicable;
  • the audited balance sheets for the 3 years prior to the application;
  • the profit and loss accounts;
  • a quarterly balance sheet for the current year;
  • information on job changes over the past 3 years;
  • a calculation of the cost engendered by potential early retirements;
  • details of a contact person who can provide additional information on the business's financial position.

The secretariat of the Economic Committee will investigate the company's eligibility for the early retirement programme.

If the application is approved, the employer must deregister the employee from the Joint Social Security Centre (Centre commun de la sécurité sociale – CCSS), specifying "early retirement" as the reason for the employee's departure.

The employer then needs to register the worker with the CCSS anew as a worker having taken early retirement (new incoming declaration).

Remunerating the employee

The employer must advance the early retirement benefit to the employee.

The early retirement allowance is paid for no more than 3 years, and in principle, ceases to be paid on the day before the beneficiary's 63rd birthday.

The monthly allowance for early retirement is calculated on the basis of the gross annual salary (both fixed and variable) which the employee actually received over the course of the 12 months immediately prior to the start of their early retirement benefit.

The following must be included in the reference pay used to calculate the monthly benefit:

13th-month payments are taken into account at a rate of one twelfth per month.

Bonuses are taken into account at a rate of one twelfth per month, based on the mean amount of payments received over the past 3 years.

Overtime pay and allowances for incidental expenses are not taken into account in this calculation.

The early retirement allowance may not exceed the monthly ceiling for pension insurance contributions (which amounts to 5 times the social minimum wage).

The duration of early retirement cannot exceed 3 years, and the payment is spread out over this period with a progressive annual decrease of 5 %. Thus, the allowance is equal to:

  • 85 % of the worker's gross monthly salary for the first 12 months;
  • 80 % of that amount for the second 12 months;
  • for the period remaining until the day the entitlement to the allowance expires, 75 % of that amount.

The business's rate of contribution

Having analysed the business's specific economic and financial situation, the secretariat of the Economic Committee sets the business's rate of contribution to the cost of early retirement.

This rate is then approved by the Government Council (Conseil de Gouvernement).

In principle, it may be between 30 and 75 % of the total cost, including employers' social security contributions.


The business's rate of contribution may be less than 30% if a job protection plan approved by the Minister for Employment is implemented.

Reimbursing the business

In principle, the Employment Fund (Fonds pour l’emploi) will directly refund the employer for the portion of costs resulting from the payment of early retirement benefit for which the employer is not responsible, including the related social security contributions.

That repayment is made on the basis of a monthly breakdown statement produced by the employer, and submitted for approval to the Minister for Employment.

This statement must be sent within 6 months of the end of the month in question. Beyond that deadline, the expenses can no longer be reimbursed.

In the event that the business ceases trading, the Employment Fund will pay the benefit directly to the employee, at the employee's request.

Renewing the application

Agreements on early retirement due to corporate restructuring are generally for one year.

Where necessary, applications must be resubmitted following the same procedure as for the initial application. The business's position will be analysed once again. Thus, renewal of the agreement is not a foregone conclusion.

The business's rate of contribution may therefore vary depending on changes to its economic, financial and social situation.

Who to contact

Early Retirement Office

Ministry of the Economy - Economic Committee

Related procedures and links

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