Paris (AFP)

A new "universal" and point-based pension system with identical social rights for all, but also a very controversial "age of equilibrium": here are the main points of the reform presented on Friday in the Council of Ministers.

Universal

The future system will cover "all people working in France, without exception": employees in the private sector and special schemes, civil servants, magistrates, soldiers, farmers, self-employed workers, parliamentarians ...

All active workers born from 1975 will contribute to a new "National Universal Pension Fund" which will oversee the 42 existing schemes - before, perhaps, absorbing them.

By points

The amount of the retirement will depend on the number of points accumulated "throughout the professional career" and no longer on the contribution period (in quarters) and the reference salary (25 best years in the private sector, last 6 months in the public).

Fundamental unit of account of the future system, the point will have an "acquisition value" (during the career) and a "service value" (for the calculation of the pension), which cannot decrease or increase more slowly than inflation, and will eventually evolve according to average wages.

Balance Age

The legal retirement age will remain at 62 (or less for certain professions), but it will be necessary to "work a little longer" to receive a full pension.

An "age of equilibrium", combined with a "bonus-penalty mechanism" of 5% per year, will thus aim to "encourage the French to leave later with a better pension".

Initially, the government planned to enter into force in 2022, gradually increasing it to 64 years in 2027. Faced with union opposition, this "short-term measure" was withdrawn from the bill, a " conference of funders "to propose by the end of April other means" of achieving financial balance ".

Early departures

Civil servants exercising certain "royal functions" (police, customs, prison guards, air traffic controllers) can always retire at 57, even 52 years of age. Ditto for the military, who will keep the right to receive a pension after 17 or 27 years of "effective service".

For other civil servants in the "active categories" and employees of special schemes, the legal age will be gradually raised to 62, but the extension of the "arduousness account" and of retirement for permanent incapacity already in force in the private sector will allow some to stop working at 60.

Career Ends

Phased retirement, which makes it possible to receive part of his pension while continuing to work part-time, will be extended to employees on a day package, special schemes and farmers.

The rules for accumulating employment and retirement will be modified so that those receiving a full pension can earn additional points when they resume an activity.

Minimum pension

Future retirees "having completed a full career" will receive if necessary "additional points" so that their pension reaches 1,000 euros net in 2022, then 83% of the Smic net in 2023, 84% in 2024 and 85% in 2025.

Family rights

Each child will be entitled to "an increase in points of 5%", allocated by default to the mother but which both parents will have "the possibility of sharing".

An additional bonus of 2% will be granted for the third child and divided equally between the father and the mother, unless they decide otherwise.

Conjugal rights

The survivor's pension will guarantee to the surviving spouse, from 55 years and after at least two years of marriage, "70% of the retirement points acquired by the couple".

These rules will however only apply "from 2037", for people who have joined the universal system. The rights of divorced spouses will be specified later by ordinance.

© 2020 AFP