France’s retirement overhaul: Macron’s greatest challenge?
PARIS (AP) — As French workers strike and protest over plans to lower pensions and delay the retirement age, President Emmanuel Macron is stepping up to advocate for his planned reforms.
Macron will take part Thursday in a debate with 600 citizens, the first in a series of public meetings organized by the government to try to convince skeptical workers that change is needed to make France’s complicated pension system fairer and sustainable in the long term.
Here’s a look at the planned changes, and why they are generating debate.
FRANCE’S AGE-OLD PENSION SYSTEM
The country’s retirement system has its roots in 1673 and the reign of King Louis XIV. Initially for royal marines, the system swelled to include civil servants in the wake of the French Revolution at the end of the 18th century. Military personnel were added in 1831, followed by others over the decades, before employees in the private sector were finally added in 1930.
Now, all French retirees receive a state pension. The average French pension this year stands at 1,400 euros per month ($1,500 per month) once taxes are deducted. But that average masks differences across 42 different pension systems.
SO MANY SPECIAL REGIMES
The easy bit: Employees in the private sector are part of the general pension system. They account for about 7 out of 10 workers.
The more complicated bit: many professions have a special pension scheme. Some people, like rail workers and air crews, are allowed early retirement. Others, like lawyers and doctors, pay less tax.
Civil servants also have a separate pension scheme.
Over the last three decades, governments have made changes but each reform has been met with massive demonstrations. None of the changes managed to simplify the system.
MACRON’S GRAND PLAN
Macron wants to replace the current way of doing things with a unified scheme, so that all French workers have the same pension rights.
He promises that would make the system fairer.
He also wants to make the pension system, which is projected to be in financial deficit in coming years, more sustainable.
Unions argue that the new system will require people to work longer and will reduce pensions. They have already held strikes and more are expected over the coming months.
The government has promised the legal retirement age of 62 won’t change, but new financial conditions may encourage some people to work longer.
Macron’s government said some specific measures would be maintained to allow military and police officers to retire earlier. Some people with physically demanding jobs would also be allowed to retire earlier.
The government has opened three-month talks with unions, employer groups and professional organizations. Ordinary citizens are also being invited to give their opinion on a dedicated website and in public meetings. The first meeting is taking place in the southern town of Rodez on Thursday, after being delayed by a week due to the death of late President Jacques Chirac.
The government says the debate and talks will help shape the new system.
The bill is expected to be debated by lawmakers next summer. The government has said the changes will only apply to people born after 1963 and will enter progressively into force between 2025 and 2040.