Understand everything about pension reform in five minutes flat

• Tuesday and Wednesday, the Prime Minister, Elisabeth Borne, discusses with the social partners around the pension reform.

• A hot topic that risks monopolizing January, and playing extra time for a good part of the year.

• 20 Minutes

  offers you a short summary if you had forgotten this reform project during the holidays.

You have emptied the jar of foie gras, the bottle of champagne and had a good holiday season.

But now, when you return to the coffee machine at work, you are asked your opinion on the pension reform.

The subject is at the center of the news: it was re-announced with great fanfare by Emmanuel Macron during his wishes on December 31, and the Prime Minister, Elisabeth Borne, receives the social partners on Tuesday and Wednesday on the subject.

You didn't follow this reform project?

No worries,

recaps all of this in five minutes, watch in hand.

Let's go !

What is the project?

The executive wishes to shift the legal retirement age from 62 to 64 or even 65, the option favored by the president, by 2031. Four months would be added each year from the generation born after June 1961. For these people, the legal age would therefore increase to 62 years and four months.

For those born after June 1962, the starting age would be 62 years and eight months.

And so on until you reach 65.

All employees would be affected by this increase in working hours, even those benefiting from a specific scheme, such as police officers or sewer workers - who would work two to three years longer -, but also people who may have to leave anticipated for long careers.

The only exception: the starting ages for invalidity or handicap, between 55 and 62, would remain the same.

Another major point of the reform, the minimum pension would be increased to 85% of the minimum wage, or around 1,200 euros per month. 

This increase would only concern retirees who have contributed for 42 years, and would not be retroactive.

If you are already retired, you will not be affected.

The age automatically giving the full rate, regardless of the number of quarters of pension insurance that you have accumulated, would remain at 67 years old.

How is it justified?

In his wishes, Emmanuel Macron recalled the objective of "ensuring the balance of our system for the years and decades to come" and "consolidating our pay-as-you-go pension system".

A widely contested argument, as Michaël Zemmour, lecturer in economics at the University of Paris 1 Panthéon-Sorbonne and co-author of

(La Découverte, 2021) points out: “It is wrong to say that our system of pensions is threatened.

The forecasts estimate a slight deficit within fifteen years, but there are many ways to reduce it, and not necessarily by attacking the retirement age.

»

According to the 2021 annual report of the Pensions Orientation Council (COR), “even without reform, the weight of pensions in GDP will decline in the coming years”.

The regime should return to a "controlled trajectory by 2070", where the system would be on average in surplus by 0.4% of GDP, i.e. a level similar to 2019, before the health crisis, according to the report.

“In 2022, the pension system has a surplus of 3 billion euros, and the forecasts are for a very small deficit, of around 0.4% of GDP, in ten to fifteen years.

There is no urgency to reform,” confirms Henri Sterdyniak, economist at the French Observatory of Economic Conditions (OFCE).

Above all, “the economic gains of this reform, if it passes, will be much higher than a possible pension deficit, continues Michaël Zemmour.

In reality, profits are planned to make possible tax cuts, especially on companies, while maintaining the course of reducing the public deficit.

»

Does France have a more generous pension system than other countries?

For Monika Queisser, head of the social policy division at the Organization for Economic Co-operation and Development (OECD), France stands out in two ways.

First, the level of spending on pensions.

They account for around 14% of GDP, making France the biggest spender in the OECD in this area, along with Italy and Greece.

Second, on the income granted to retirees.

“In most OECD countries, there is a slightly lower standard of living for retirees compared to the population as a whole,” notes the expert.

Three exceptions: Luxembourg, Italy again, and therefore France, where the standards of living between retirees and members of the active population are more or less similar.

For age, on the other hand, even before this potential reform, our country has less appeal than one might think.

"It is very complicated to compare the starting age, because each country has specific rules: full rate, legal age, minimum starting age...", warns Monika Queisser.

To balance the countries, the specialist imagines the case of an individual who would have entered the labor market at 22 years old - the OECD average: "Since in France, a person must already work between 43 and 44 years old to have a full pension, that takes our 22-year-old worker up to 65 or even 66, which is the average for OECD countries”.

The only difference with most Nations: a Frenchman who would start in the world of work at 20 years old and would not stop “can currently leave with a full pension at 62 years old.

It's earlier than in most countries, where you can't leave before 64 or 65 with a full pension,” concludes Monika Queisser.

Well, you know everything!

Company

The French Hospital Federation pleads for the pension reform to finance old age

Policy

Pensions: Elisabeth Borne will receive the social partners on Tuesday and Wednesday

• Economy

• Retirement

• Pension reform

• Work

• pension saving

• Emmanuel Macron