The proposed reform to the retirement age and the benefits that come with stopping work prompted 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 age for retirement is being pushed back to 64. You might be thinking that it seems to compare favourably with neighbouring Germany and Italy (both 67) and Spain and Belgium (both 65). But, retiring at 64 in France does not necessarily guarantee a full pension. Following the reform, people will have to work for 43, rather than 42, years to ensure a full state pension. It means most people will only be eligible for it from the age of 67.
Encouraging the employment of older people
In France, the employment rate for 55-64 year olds is 56%, while the average in Europe is 60.5%, according to the OECD. To fight against unemployment among the oldest employees, the government has decided to create a «senior index.» Simply put, it’s a way of pushing 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 would lead to sanctions.
A new type of permanent 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) at a disadvantage
As our colleague Sophia Khatsenkova explains, women are currently disadvantaged because they tend to retire later than men and have lower pensions. They’re approximately 40% lower, in fact. This is for several reasons, including a tendency to do part-time work and, of course, maternity leave. With the reform, women will retire later and would, on average, work seven months longer during their lifetime. For men, it would be five months. «Women will be a bit penalised by the reform» admitted Franck Riester, the Minister Delegate for Parliamentary Relations, on 23 January.
A minimum pension for low salaries
The new reform provides for a minimum pension of 85% of the French minimum wage; it means that employees who have worked for 43 years will get a minimum of 1,200 euros a month of pension (based on today’s minimum wage). According to the French government, it’s a social measure to help increase small pensions. But, this measure is only expected to impact 20,000 French people, according to the latest government estimates. In France today, the average pension is approximately 1,400 euros.
What next?
Opposition parties have tabled motions of censure: a motion criticising the behaviour of the government. A debate about them is expected in parliament from Monday, 20 March. For the government to be censured, a motion would have to receive an absolute majority of 289 votes out of 577 elected members.
Trade unions have called for spontaneous demonstrations, culminating in a new day of strikes and protests, scheduled for Thursday, 23 March.