French citizens may soon have to work longer to get full pension

A new proposal to save public money would force french citizens to either retire later or accept smaller pension checks.

Jean-Paul Delevoye, French political adviser to Macro
Protests have been planned in France after Jean-Paul Delevoye, a special adviser to French President Emmanuel Macron, presented plans to reform the country's pension system [Benoit Tessier/Reuters]

The age when French citizens can receive a full pension should be put back to 64 from 62, the government’s special adviser to the president on pension reform said on Thursday.

In a report, Jean-Paul Delevoye, said workers could still retire at 62 as promised by President Emmanuel Macron during his campaign, but they would have to work two years longer to draw a full pension without any discount in a new system due to take effect in 2025.

The reform, which aims to unify 42 different pension schemes into a single, points-based system, is potentially explosive.

Private pension plans are little used in France and so most workers draw their pensions from the compulsory state-backed system.

Labour unions have a record of opposing changes to pensions, often sending millions onto the streets to protest.

On Thursday, two hardline unions, FO and CGT, called for strikes on September 21 and 24.

“This system is all smoke and mirrors,” Philippe Martinez, leader of the Communist-backed CGT union, which has long commanded support from government employees and workers at power plants and railways.

“The message we’re sending to workers today is that we should mobilise.”

Two years into his presidency, Macron is eager to relaunch his reform agenda after spending several months rebuilding political capital and trying to quell anti-government “yellow vest” protests.

The yellow vest movement started among provincial workers who camped out at traffic circles to protest an increase in fuel taxes, sporting the high-visibility vests all French drivers must keep in their cars for emergencies.

The protests spread to people across political, regional, social and generational divides angry at economic injustice and the way Macron is running France. At its height, a quarter of a million people marched around France and polls suggested more than 80 percent of French people supported the movement.

Macron, a former investment banker, lost little time in his first months in office overhauling a strict labour code to make it easier to hire and fire, as employers had long urged, and also brought in tax cuts for investors and companies to encourage investment that would create jobs.

But plans to reform unemployment insurance were only unveiled in June after months of delay, and the government is now treading carefully with the pension overhaul, which is not expected to pass through Parliament before the end of the year.

Prime Minister Edouard Philippe was careful to flag negotiations with unions, in contrast with the first raft of reforms, which Macron rammed through Parliament via decrees, infuriating even the most reformist unions.

“A new phase to listen and consult social partners and citizens will start on this basis,” he tweeted.

However, Delevoye is a close Macron ally, and people close to him say his recommendations are in line with what the president wants and are unlikely to change much in the bill.

The reform is especially aimed at the “special pension regimes” of the state railway operator SNCF, the Paris metro company RATP and state utilities such as EDF, whose pension plans receive 5.5 billion euros ($6.2bn) every year from taxpayers to plug their chronic deficit.

Laurent Berger, leader of the reformist CFDT, France’s biggest union, said Delevoye’s recommendations were “only a report”, suggesting that he expected some flexibility.

“The CFDT will offer an opinion once we are presented with a bill,” he said. “This report is just one step.”

Source: News Agencies