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3 October 2018

France: the future of the retirement system on-line surveyed and discussed

The French government has begun an online consultation about future reform of the pension system. In parallel, it has also begun a consultation process with the social partners. According to the High Commissioner charged by the government to initiate the consultations, the pension system will remain organised on a collective basis.

The High Commissioner charged by the Government to drive and coordinate the preparatory work for  pension reform has opened an on-line consultation. According to the Commissioner, the subject is of such a magnitude that it requires a wide consultation of citizens. The consultation platform that runs until the end of 2018 is open to all. In the frame of the public consultation, citizens are also invited to participate in a series of regional workshops that will assess the impact of the decisions to be made in 2019. The results are to be reported to the public and the political decision-makers.

In his explanation the commissioner stated that the country’s system will remain collective and supportive, based on redistribution and intergenerational solidarity. It will also need to integrate solidarity mechanisms that take into account the diversity of careers and pursue a goal of equality between women and men. Incentives to extend careers are to be maintained to enhance the efforts of those who continue to work longer and to encourage the employment of older workers. A minimum pension will be guaranteed to people with modest incomes during their career.

In parallel, the commissioner has planned a social partners’ consultation that will focus on the main principles of the reform, its implementation and the conditions for the transition to a new system. It is expected that the first reform proposals will be finalised by the end of 2018 or early 2019. The presentation of a draft reform is the start of a new phase of consultation with the social partners before a final draft is addressed to the Council of Ministers and the parliament.

Citizen’s opinions on the pension system was already the subject of a survey published in December 2017, which indicated that most remain attached to a public pension system. With an overwhelming majority (90%), the respondents were in favour of a pay-as-you-go public pension system, and one in two wants to keep the pay-as-you-go system while reforming it. The other half (mostly under-50s, workers and employees) thinks that additional insurance or individual savings must be added to the current scheme. A majority of the 3000 persons that participated is in favour of a single pension plan or a common base supplemented by some specificities related to professional status. The survey showed most remain favour of early retirement schemes, especially for workers entering the labour market at a young age.

The current statutory pension system is based on two pillars, a basic scheme and a supplementary scheme. The basic scheme covers most of the private sector employees (17 million contributors, representing 2/3 of the active population, with some 14.1 million pensioners covered). The supplementary schemes were created in 1947. A law of 29 December 1972 made membership of a formerly optional supplementary pension scheme compulsory. At the end of 2016, the average retirement age was, in practice, 61 years and 10 months. Over a period of 6 years, the average age of workers retiring has slowly increased by 1 year and 4 months. Observers expect this slow increase to continue as the statutory retirement age rises in the coming years.   

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