Originally due to be announced in mid December, the government had delayed in order to have further consultations with political opponents and unions leaders in a (probably doomed) attempt to bring them on board with the reforms.
Presenting the outlines of the government’s plans on Tuesday after months of suspense, Prime Minister Elisabeth Borne said that doing nothing about projected deficits for the pension system would be “irresponsible”.
“It would lead inevitably to a massive increase in taxes, a reduction in pensions and would pose a threat to our pensions system,” she said.
Here are the main parts of the plan announced on Tuesday;
Retirement age of 64 – this was undoubtedly the most controversial part of the reform, and a retirement age of 65 was initially envisaged. The government appears to have compromised on this, but the raising of the pension age from the current 62 is still likely to be unpopular.
Gradual implementation – Borne said: “I say clearly, no, this project will not be implemented overnight: the retirement age will be raised gradually, over a period of eight years.” The age will be raised gradually by three months at a time, reaching 64 in 2030.
Exceptions for people who start work early – the retirement age will remain at 58 for those who started working before the age of 16. For those who started between 16 and 18, it will be from 60. And for those who started between 18 and 20, it will be 62.
Final age of 67 – conversely, there is also an upper age for those who start work late – for example after completing long higher education courses. French workers normally have to pay a minimum number of contributions (amounting to 43 years of work for most people) in order to secure a full pension, but they can retire at 67 even if they have not completed the minimum number of payments (the system is different for those who have worked and contributed to a pension in another country).
Exceptions for certain professions – certain active or dangerous professions will keep a retirement age of 62, for example firefighters and members of the military.
End of ‘special regimes’ – The ‘special regimes’ that certain workers enjoyed that gave them earlier retirement ages and other privileges will end. Among those affected are train drivers and employees of the Paris public transport network, gas and electrical engineers and notaires. It is a question of fairness,” said Borne.
Increased minimum pension – pensions in France are based on contributions, but there is a minimum level and anyone whose pension is below that is entitled to top-ups. This minimum will be raised to 85 percent of minimum wage, which would be €1,200 a month based on the current minimum wage.
Borne has previously laid out the timetable for the political process – the detailed plans will go before the Council of Ministers on January 23rd and then proceed to parliament for a (likely extremely fraught) debate at the start of February. The stated aim is to have the reforms passed and in place by September 1st.
However, there is likely to be plenty of opposition – both from opponents in the parliament and on the street.
The Macron government lost its majority in the June parliamentary elections, so in order to get this bill passed it will either have to make a deal with a rival party – most likely the centre-right les Républicains – or resort to the emergency power known an Article 49.3 to push it through without a majority vote.
Even before the details of the plan were revealed, unions had threatened ‘mobilisation’ in January. A joint statement by unions later on Tuesday confirmed they would call their first strike for January 19th.
Borne also acknowledged widespread public opposition to the changes and a looming battle with trade unions.
“I’m very aware that making changes to our retirement system is causing anxiety and fears among French people,” she told the press conference.
All attempts over the past 30 years to reform the pension system have been controversial, leading to the two longest-running strikes in the post-war period in 1995 and again in 2019/20.
The French pension system is currently in credit, but predicted to go into debt next year, a situation that is predicted to worsen as the population lives longer. According to Finance Minister Bruno Le Maire, the pension system would have a deficit of €13.5 billion by 2030 if nothing was changed.