If re-elected, the French president plans to reform their pension system.

France's next presidential election is due to be held in April 2022. Early March, Emmanuel Macron officially announced his renewed candidacy. The gossip factory now ends with the publication of his election manifesto: If re-elected, he intends to raise the retirement age from 62 to 65.

The French pension insurance system

France's pension insurance system consists of a basic pension and a statutory supplementary insurance. The basic pension is based, among other things, on the average annual income (gross pay) of the 25 best professional years and the insurance period. The supplementary pension is calculated on the basis of a points system. There are also around 40 special schemes for specific occupational groups. As high as 900 euros can also be paid out additionally to pensioners in the low-income group.

The statutory retirement age in France is currently 62 (for those born in 1955 or later), with some deductions. Depending on other factors, the full pension rate is received at the age of 67 at the latest. For people who started working very early and meet the requirements for minimum insurance duration and minimum insurance contributions, early retirement is possible from the age of 60. Severely disabled persons (permanently at least 50 per cent) can retire between the ages of 55 and 59.

The French pension system has been facing financial problems for quite some time now. Overall, the retirement regulations there are considered relatively generous. Complicating matters further is rising life expectancy: the average age of the French in 2019 was 83 – the EU average was 81.1.

Pension reform has been planned for a long time

In view of the financing problems, comprehensive reform of the pension system was already on the agenda of the current French President, Emmanuel Macron, when he took office in May 2017. His ideas at the time included raising the retirement age to 64 and standardising the system by eliminating special regulations. The reform plans led to massive political opposition and months of strikes during his tenure. Nevertheless, they were on the verge of being passed in the spring of 2020 but then suspended due to the coronavirus pandemic.

Reform project in an adapted form

The next presidential election is coming up in April. At the beginning of March, Macron officially stood for re-election as head of state and, less than two weeks later, presented his new election manifesto, which also envisages his plan for the pension reform. He had already indicated last summer that he would probably not continue the "very ambitious" project from the time before the current pandemic.

In fact, the manifesto for the 2022 election now includes a proposal to gradually raise the statutory retirement age to 65. Disability, arduous activities and length of qualifying service should be taken into account. Furthermore, it is planned to abolish the special systems in certain occupational groups, at least for new entrants. In return, the minimum pension will be increased from 1,000 to 1,100 euros when a full pension is drawn. Further tax relief is also planned.

Target: Full employment in France

According to the election manifesto, these measures serve to increase France's economic power and independence as part of a "productivity pact to increase work for all." To this end, the transformation of the current employment agency, including stricter unemployment insurance, and the reform of minimum social security are also planned; Macron is aiming for full employment in France.

The incoming French leadership faces the challenge of solving the existing financial problems in the French pension system without jeopardising the economic recovery after the coronavirus crisis. The current unpredictable situation in Ukraine and its economic consequences will play a further role, thus rendering this balancing act even more difficult.