In the beginning of January, the French
government presented its pension
reform plans. The main aspects are the gradual
increase of the current retirement age of 62 years to 64 by 2030 and the
accelerated increase of the contribution periods required for a deduction-free
pension from 42 to 43 years. The reform is also intended to contribute to
greater unification of the French pension system in the long term.
Focus on ensuring financial sustainability
The French Social Advisory Council (Conseil
d'orientaion des retraites) had published
calculations in September 2022 according to which the pension insurance
will have a deficit in the medium term, which is expected to be between 0.5 and
0.8 per cent of the gross domestic product in 2032. In 2022, the pension
insurance has still shown a slight surplus amounting to 0.1 per cent of the
gross domestic product. The French government rejects financing the deficit
through taxes, citing investments to achieve the climate goals. To ensure
financial sustainability, the reform focuses on raising the retirement age and
increasing the employment of older workers.
Raising the retirement age in France
Until now, insured
persons in France have been able to retire without deductions at the age of 62
if they have made contributions to the pension insurance for 42 years.
According to current pension law, these minimum contribution periods are to
increase to 43 years by 2035. For all insured persons who do not fulfil these
periods, the standard retirement age of 67 years applies to a retirement
without deductions. Under the French government's proposal, the
retirement age is to be raised annually by three months to 64 by 2030.
Furthermore, the increase in minimum contribution periods will be brought
forward to 2027. The standard retirement age of 67 is not affected by the reform.
Increased retirement age: exeptions
The lower pension age limits for workers in
particularly stressful occupations, such as in the military or nursing staff in
hospitals, are not to be changed. In contrast, the retirement age of long-term
insured persons will be adjusted. The aim is to ensure that no one has to work
longer than 44 years to receive a pension without deductions. According to
this, insured persons who took up gainful employment before the age of 16 and
have consistently paid contributions can retire at the age of 58. The
retirement age is 60 for 16-18 year olds and 62 for 18-20 year olds.
To strengthen prevention in the workplace,
the draft provides for the introduction of a fund worth a billion euros.
Medical care for workers in high-stress occupations is also to be improved.
Furthermore, new possibilities for financing occupational retraining leave are
to be created.
Long-term goal: Unification of the pension system
The central aim of the unimplemented reform
of the pension system during Emmanuel Macron's first term of presidency was to
unify the pension system and abolish the various special pension schemes. The
current reform proposal is far less ambitious in this regard. The different
calculation of pension entitlements, such as in the public service or in the
compulsory supplementary pension schemes, have not been addressed at all. The
above measures to increase the retirement age are to be applied only to new
workers in special pension schemes, such as workers in the Paris public
transport company RATP, the energy and gas utility EDF, the central bank and