Not only about retirement at 64: what you might have missed from the pension reform in France
The proposed reform of the retirement age and benefits associated with the termination of work caused outrage in France. But why is it causing so much controversy? Here’s what we think you should know about it.
It’s not just about retiring at 64.
Today in France, anyone can retire at 62. With this reform, as you may know, the statutory retirement age is lowered to 64. You might think that this is advantageous compared to neighboring Germany and Italy (both 67 years old). and Spain and Belgium (both 65). But retirement at age 64 in France does not necessarily guarantee a full pension. After the reform, people will have to work 43, not 42, years to secure a full state pension. This means that most people will only be eligible at age 67.
Stimulating the employment of the elderly
According to the OECD, the employment rate for 55-64-year-olds in France is 56%, while the European average is 60.5%. To combat unemployment among the oldest workers, the government decided to create an “older people’s index”. Simply put, it’s a way to force companies to publish data on the number of employees over 55 people. The government is aiming to make it mandatory for all companies with more than 1,000 employees to publish this data from November. Non-compliance entails sanctions.
It is also planned to introduce a new type of permanent contract called “CDI Seniors”. This contract will be exempt from certain financial contributions to encourage companies to hire people over 60.
Women (still) at a disadvantage
As our colleague Sofia Khatsenkova explains, women are currently at a disadvantage as they tend to retire later than men and have lower pensions. In fact, they are about 40% lower. There are several reasons for this, including a penchant for part-time work and, of course, maternity leave. Thanks to the reform, women will retire later and work an average of seven months longer during their lives. For men, it will be five months. “Women will be slightly penalized by the reform,” acknowledged Frank Riester, Minister Delegate for Parliamentary Relations, on 23 January.
Minimum pension for low wages
The new reform provides for a minimum pension of 85% of the minimum wage in France; this means that workers who have worked for 43 years will receive a pension of at least 1,200 euros per month (based on today’s minimum wage). According to the French government, this is a social measure designed to help increase small pensions. But according to the latest government estimates, the measure will only affect 20,000 French people. Today in France, the average pension is about 1,400 euros.
Opposition parties introduced a vote of no confidence: a movement that criticizes the behavior of the government. Debate on them is expected in Parliament from Monday, March 20. For the government to be condemned, the proposal must receive an absolute majority of 289 votes from 577 elected members.
Unions have called for spontaneous demonstrations, culminating in another day of strikes and protests scheduled for Thursday 23 March.