France’s Mother-of-All Pension Reforms Is Finally Revealed

(Bloomberg) -- The pinnacle of Emmanuel Macron’s efforts to modernize France is finally on the table, after nearly two years of preparation.

The French president is pressing on with his campaign promise to gradually merge 42 different public pension systems and encourage people to work longer. His plan was handed to Prime Minister Edouard Philippe on Thursday for consideration.

Pensions are seen as the mother-of-all reforms in France and several previous governments have backed down in the face of public opposition to their attempts to change it. Macron’s effort comes just as the Yellow Vest protests subside. Still, the plan has risks and CGT labor union chief Philippe Martinez is already planning demonstrations in September.

Under the plan, the minimum retirement age will remain 62 but incentives will be introduced to encourage people to work longer. French contributors will be able to have a full pension at age 64. The calculation of the pension will be based on points gathered throughout an individual’s career.

Some sectors, like the army and the police, will maintain a special system under the plan, which was crafted by the former conservative minister Jean-Paul Delevoye, a 72-year-old veteran of social negotiations.

After today’s presentation it will be discussed further with French labor and business unions and will get a vote in Parliament next year -- probably after the nation-wide mayoral elections in the Spring.

Macron has already simplified labor laws to make them more flexible, scaled back a wealth tax and he changed the national railway status to open the system even more to competition. The government last month proposed changes to France’s unemployment benefits to encourage people to get back to work, while discouraging companies from resorting to short-term contracts.

To contact the reporter on this story: Helene Fouquet in Paris at hfouquet1@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Caroline Alexander, Richard Bravo

©2019 Bloomberg L.P.