The French national pension is on the verge of bankruptcy, and President Macron pushes for pension reform.

(Reuters file photo)

Anti-pension system falls into deficit, Mark Hong pushes reform

[Financial Channel/Comprehensive Report] The French have the longest retirement life among the countries of the Organization for Economic Cooperation and Development (OECD), but as the population structure changes, the national pension is on the verge of bankruptcy, and the next generation may not be able to receive pensions.

French President Emmanuel Macron has repeatedly reiterated since taking office in 2017 that as the average life expectancy of the people increases, they must also "need to work longer", otherwise the government's finances will not be able to make ends meet.

So he also insisted that the pension system must be reformed.

In addition to simplifying the system and abolishing the privileges of workers in specific industries, the pension reform will also extend the statutory retirement age from the current 62 to 64.

In addition, the conditions for receiving a full monthly refund have also become the key reason for the public's rebound.

After the reform, no matter how old you start working in the future, people must withhold 43 working years before they can have a full monthly refund.

Please read on...

According to European Union (EU) data, French workers retire earlier than people in many European countries, which means that France pays higher pension costs than most countries. Reasons to try to reform the country's heavily indebted pension system.

Pension reform was one of Macron's main issues in last year's re-election campaign.

The Macron government stated that this is a necessary action to prevent the pension system from becoming a deficit and increase the burden on young people, but it has not been paid by the public.

Pension reform was one of Macron's main issues in last year's re-election campaign.

(Bloomberg file photo)

A look at the French pension reform

The French pension reform plan contains 5 key points:

Postpone the statutory retirement age: This reform in France will gradually postpone the statutory retirement age from 62 years old, and will be postponed by 3 months per year to 64 years old in 2030.

The working year extension schedule is advanced: According to the annuity law enacted in 2014, workers born after 1973 must have 43 years of tax deduction to receive a full pension from 2035; the threshold of 43 years in the reform bill is not However, it will be implemented in advance to 2027.

The special pension system has entered history: Due to historical origins, French civil servants and employees of state-level institutions often have a special retirement system. The calculation methods of working hours and retirement conditions are more favorable than those of ordinary workers.

But the new system will put an end to the special system. Bona said that new employees such as the Paris Metro, the electricity and gas industry, and the Paris bank will all be subject to the general retirement system in the future.

"Small annuity" increase: In order to allow workers with low salaries and unstable working hours to still have basic living security after retirement, the minimum annuity will be increased to 85% of the net minimum wage, which is equivalent to about 85% of the net minimum wage at the current level. Nearly 1,200 euros (approximately NT$39,250); in other words, this measure not only includes future retirees, but also applies to current retirees.

"Long-term career" mechanism: The government will launch a "long-term career" mechanism to allow workers who enter the workplace before the age of 20 to retire before the legal age on the premise of paying sufficient years of withholding.

Bernard stressed that the bill would be adjusted "so that no one who entered the workforce earlier is forced to work for more than 44 years."

In addition, the toil and danger of the occupation will also be included in the calculation elements of the annuity. Heavy-duty labor, police firefighting, military and other dangerous occupations all retain the possibility of early retirement.

The French people went on strike and took to the streets.

(Reuters file photo)

Public anger burns as all staff strikes and demonstrates

As soon as the pension reform draft came out, it caused dissatisfaction among trade unions across the country. For several months, millions of people across France have been demonstrating and going on strike.

On December 5, 2019, various professional trade unions in France launched a nationwide "cross-professional" and "indefinite" strike. Not only the Paris Metro (RATP) and the French National Railways (SNCF) canceled most of the shifts, but even electricians, hospitals, teachers, etc. Both government and lawyers announced they would join the strike, and there was no truce during the Christmas period. Both the government and the strikers were under tremendous pressure.

Some union leaders have warned they will stick with the strike until Macron abandons his campaign promise of major reforms to the retirement system.

Regardless of government or private data, this mobilization is the most powerful protest in the past 30 years

France's Socialist Party leader Fauer claimed that Macron had created a social and political crisis that would "paralyze the country and isolate the president".

The people’s anger over the bill and the way the government is advancing continues to rage. So far, France has held nine national strikes this year, peaking on March 7, when a total of 3.5 million people took to the streets to protest, and slightly reduced on March 15, but still A whopping 1.7 million people responded.

The ruling party used Article 49.3 of the constitution to force the passage of the pension reform bill.

(Reuters file photo)

Annuity reform is hard to pass, and the sign of democracy is not guaranteed

The French National Assembly was originally scheduled to vote on the retirement reform bill on the 16th. Since the ruling party did not have a majority to pass it, it announced the use of Article 49.3 of the constitution before the meeting to force the bill to pass.

Bernard said, "We cannot risk the 175 hours of congressional debate in vain due to the uncertainty of a few votes. Based on Article 49.3 of the Constitution, the government is obliged to amend the overall bill of fiscal law related to social security in 2023." Not only There was an uproar in the conference venue, and the anger of the people outside the venue was also ignited.

Many people believe that the government should make up for the annuity deficit by taxing companies and high-income earners, rather than directly putting a knife on the neck of workers.

Although the opposition forces tried to overthrow the government and block the bill through a no-confidence motion, they still failed by only 9 votes. We can only hope that the Constitutional Council can block everything.

Macron mentioned on the 22nd, "When I started working, there were 10 million retirees, now it is 17 million, and by the 2030s it will reach 20 million. Do you think we can continue to use this law? We don’t necessarily want to hear the truth, but what I want to tell you is that this reform is not a luxury, nor is it fun, but a necessity for the country.” Supporters and opponents disagreed, and Macron’s remarks deepened the tension between the government and the people. gap.

Luxembourg workers are the earliest to retire, bidding farewell to the workplace at an average age of 60.2.

(Photo by European News Agency)

Comparison of retirement systems in European countries

Compared with France, the pension systems in European countries are very different.

The statutory retirement age in Germany, Italy and Denmark is 67 years old, and the current system in Spain is 66 years old, which will be raised to 67 years old in 2027.

In the UK, the current retirement age for claiming a state pension is also set at 66.

However, pension systems vary greatly from country to country, and people who start their careers at a young age or whose work requires labor are often allowed to retire earlier.

The average retirement age for French workers is 62.3, according to 2019 figures from the European Commission.

That's far earlier than Italy, where workers claim a pension on average at 65.5, Germany at 64.6, Portugal at 64.3 and Spain at 64.2.

Overall, the average retirement age of EU citizens is 63.8 years old, among which Luxembourg workers are the earliest to retire, bidding farewell to the workplace at an average age of 60.2 years old.

Grasp the pulse of the economy with one hand I subscribe to Free Finance Youtube channel

Already added friends, thank you

Welcome to 【Free Finance】

feel good

Already liked it, thank you.

related news