France Raises Pension Age to 64 in Defiance of Protests
France Raises Pension Age to 64 in Defiance of Protests
(Bloomberg) --
French workers will begin contributing to a new public-pension system from 2025 under President Emmanuel Macron’s plan to update the country’s complex and generous existing arrangements.
After days of strikes disrupting life across the country, Prime Minister Edouard Philippe promised minimum full benefits of 1,000 euros ($1,100) a month and said that the age for receiving a full pension will rise to 64 from 62 in 2027 -- later than some commentators had predicted. He said the legislation will go to lawmakers in February and he aims to have the bill passed by the end of next year.
“I hear the concerns expressed over recent days. I understand them,” Philippe said as he set out the plan at an event in Paris. “We may disagree on some points, but the ambition is for a universal system with social justice. There is no hidden agenda.”
Labor unions have vowed to extend and intensify their protests and strikes started last Thursday. The moderate CFDT union said the government has crossed “the red line” by choosing a one-size-fits all system and to make 64 the new age for a full pensions “for budgetary reasons.”
While the government has been making conciliatory noises in a bid to avoid a total blockade of transport, schools and other public services, pushing through a central election pledge is an important political test for 41-year-old Macron.
The reform aims to ensure pension payments don’t place a burden on the state budget and that all contributors will have the same entitlements -- ending the special regimes that let some workers retire in their early fifties. Some economists and many low-paid workers have challenged the president’s assertion that the new plan will mean equal rights for everyone while unions have planned further demonstrations for Dec. 12 and Dec. 17.
Here are the main details of the plan:
- One pension system instead of 42 currently
- Benefits indexed to wages, not inflation
- New regime applies to everyone born from the start of 1975
- Those who are born from 2004 will only contribute to the new system
- Legal retirement age unchanged at 62, full benefits not available until age 64
- Retirement age rises to 64 from 2027
- Minimum pension of 1,000 euros a month from 2022 for those who worked a full career
- Minimum pension pegged at at least 85% of the minimum wage
- Workers earning more then 120,000 euros a year will pay extra
- Those who started work before 18 and those with “hardship” jobs, including night workers and nurses, will still be able to retire with full pension at 62
- Prison guards, police officers and firefighters will keep their special regimes
--With assistance from Caroline Connan and Angeline Benoit.
To contact the reporter on this story: Helene Fouquet in Paris at hfouquet1@bloomberg.net
To contact the editor responsible for this story: Ben Sills at bsills@bloomberg.net
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