Not just about retiring at 64: What you might have missed in the French pension reform

The proposed reform of the retirement age and the benefits that come with stopping work sparked an outcry across France. But why is it proving so controversial? Here’s what we think you should know about it.

It’s not just about retiring at 64

In France today everyone can retire at 62. With this reform, as you may know, the legal retirement age is pushed back to 64. You might think that this seems to compare favorably with neighboring countries Germany and Italy (both 67). and Spain and Belgium (both 65). But retiring at 64 in France does not necessarily guarantee a full pension. After the reform, people must work for 43 instead of 42 years to secure a full state pension. This means that most people will only be entitled to it from the age of 67.

Promotion of the employment of the elderly

In France, the employment rate for 55-64-year-olds is 56%, while the average in Europe is 60.5%, according to the OECD. In order to combat unemployment among the oldest wage earners, the government has decided to create a “senior index”. In short, it is a way of pressuring companies to publish the number of employees over 55. The government aims to make it compulsory for all companies with more than 1,000 employees to publish this data from November. Failure to comply will lead to sanctions.

A new type of fixed contract, called “CDI seniors”, is also planned. This contract would be exempt from some financial contributions to encourage companies to hire people over 60.

Women (still) disadvantaged

As our colleague Sophia Khatsenkova explains, women are currently at a disadvantage because they tend to retire later than men and have lower pensions. They are actually approximately 40% lower. This is for several reasons, including a tendency towards part-time work and, of course, maternity leave. With the reform, women will retire later and would work an average of seven months longer over their lifetime. For men it would be five months. “Women will be slightly penalized by the reform,” admitted Franck Riester, Minister Delegate for Parliamentary Relations, on 23 January.

A minimum pension for low wages

The new reform includes a minimum pension of 85% of the French minimum wage; this means that employees who have worked for 43 years will receive a minimum of 1,200 euros per month in pension (based on today’s minimum wage). According to the French government, it is a social measure to help increase small pensions. But this measure is expected to affect only 20,000 French people, according to the latest government estimates. In France, the average pension today is approximately 1,400 euros.

What’s next?

Opposition parties have tabled a vote of no confidence: a motion criticizing the government’s conduct. A debate on them is expected in parliament from Monday 20 March. For the government to be censured, a proposal must have an absolute majority of 289 votes out of 577 elected members.

Unions have called for spontaneous demonstrations, culminating in a new day of strikes and protests, planned for Thursday 23 March.

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