Pension reform in France - what the French do not agree with

This Thursday, March 16, the government decided to resort to resolution 49.3 so that the pension reform would be adopted without a vote in the Assembly. Around 3:20 p.m., Prime Minister Elisabeth Bourne announced, amid protests from MPs, that she wanted to take charge and trigger Article 49.3 of the Constitution.

Vote of no confidence

The opposition reacted quickly. “Parliament has been humiliated,” PCF Secretary General Fabien Roussel said into the microphone. BFMTV reports that for Marine Le Pen, using 49.3 is “an admission of the complete failure of Emmanuel Macron.” She said she would introduce a vote of no confidence to force Elisabeth Bourne's government to resign.

Bill

After several weeks of debate in the Assembly and then in the Senate, the text of the bill was approved by a joint committee, and was ratified by the Senate (195 votes in favor and 112 against). On March 16, it was supposed to be considered by deputies for a final vote. But the Prime Minister decided to adopt the project without a vote of the lower house of deputies.

What does the pension reform planned for 2023 consist of?

In addition to increasing the statutory retirement age from 62 to 64 years, in combination with extending work experience, the pension reform project provides for a number of measures. Here's the gist:

• The minimum labor pension will be increased to 85% of the minimum wage this year: this measure applies to all current and future pensioners who have completed their full working career on the minimum wage, that is, 40,000 pensioners annually out of 800,000 eliminating their rights.
• Improving the long career system: retirement will be possible from age 58 for people who started working before age 16. The legal age will be set at 60 for people who started working before age 18, and at 62 for people who started working before age 20.
• Better take hard work into account: to this end, the executive announced strengthened medical controls, the possibility of early dismissal, the creation of a prevention fund with a capital of one billion euros and an improvement in the occupational prevention account (lowering thresholds for night work and rotating shifts, creating vocational retraining leave ).
• Special Feature for Disability or Disability: Employees with a disability or disability will be able to retire at full pay at age 62.
• Parental leave will be taken into account: paternity leave will now be taken into account when calculating pensions, and family carers will receive quarterly validation.
• Cancellation of special regimes (IEG, RATP, notaries and civil servants, members of CESE and Banque de France) for new participants.
• Create a senior employment index: From the end of 2024, all companies with more than 300 employees will be required to provide information on a public index of senior hiring and employment rates. This measure will become mandatory starting this year for companies with more than 1,000 employees.
• Promote phased retirement: improving the phased retirement system and extending it to government employees.
• Additional contributions will open up additional rights at retirement, legitimize quarters and thus allow for a revaluation of the pension.
• Additional contribution from employers: In return for these efforts, employers will have a reduced contribution to the occupational accident and disease insurance scheme.
• Pension increase of 5% (1,25% per quarter of work between the ages of 63 and 64) for those who reach the retirement age required to receive a full pension at age 63, one year before the statutory retirement age. Presented as support for mothers, this measure could technically apply to men as well.

How does the government justify its pension reform?

The executive branch believes that pension reform is necessary to ensure the sustainability of the pay-as-you-go pension system. The latter is based on intergenerational solidarity, that is, on the fact that active people contribute to the payment of pensions to current retirees. However, the number of pensioners is growing faster than the number of workers, influenced by increasing life expectancy. According to INSEE, there will be 1.5 contributions per retiree in 2040, up from 4 contributions per retiree in 1980. Consequently, the government recommends forcing the French to work longer in order to increase contributions to “protect the pension system.”

This finding is partly supported by the latest Council of Retirements Report (COR), published in September 2022. In all the scenarios examined by COR, these projections are determined according to several economic factors, such as the unemployment rate and gross domestic product - the pension system in its current form will become "potentially deficit before 2039." However, the COR report does not indicate that the French pension system is “at risk” or that reform of the statutory retirement age is necessary to protect it, as the executive claims.

Source: https://www.journaldunet.com/management/emploi-cadres/1195133-reforme-des-retraites-2023-le-projet-de-loi-devant-l-assemblee-pour-un-vote-definitif/