Graphic shows European pension spending and main changes in French pension reforms.
GN39816

BUSINESS

France’s heated debate over pensions

By Duncan Mil

December 20, 2019 - President Emmanuel Macron’s controversial pension reforms aim to streamline benefits and address inequality in France’s pension system. Unions have responded with crippling nationwide strikes.

Macron wants to raise the retirement age to 64 and says the current pension system costs too much. France’s spending on pensions is among the highest in Europe -- at 15 per cent of gross domestic expenditure, pensions cost an eye-watering €343 billion in 2018, and this is forecast to rise by €17 billion by 2025.

France’s “Retraite De Base” system depends on people currently in work funding the pensions for those who have retired. With the number of pensioners rising due to the post-war baby boom and employment levels continuing to fall, the number of people funding pensions is decreasing.

French workers receive among the world’s most generous state pensions through a Byzantine system of 42 state pension regimes. Macron wants to change this to a single points-based system in which each day worked earns points for a worker’s future pension benefits.

All French retirees receive a state pension, currently standing at €1,400 per month ($1,500 per month). Under Macron’s grand plan, retirees will receive €1,000 minimum monthly pension for those who have worked a full career.

Unions say the pension reform is part of Macron’s plans to dismantle hard-won worker rights. They want to preserve a system that allows some workers -- mariners, rail workers and even ballet dancers at the Opéra de Paris -- to retire as early as their 50s.

France’s biggest union, the reform-minded, moderate CFDT, is open to the idea of a points-based system. Still, the hardline CGT and Force Ouvriere public sector unions reject the reform outright.

PUBLISHED: 20/12/2019; STORY: Graphic News; PICTURES: Getty Images
Graphic News Standards