subject: How to Understand the Reform of the French Pension System? [print this page] In France, the workers can retire at age 60 if they have worked 41 to 42 years. The retirement age at 60 was set by former French president Mitterrand in 1982. Some can even retire at age 70 if they wish.
However, some people who work in public transport could retire at age 55; others who have hard jobs like the miners or the train drivers could retire at age 50 but Sarkozy's government put an end to the exceptions to the system (rgimes spciaux) in 2007.
A general pension system grants 50 to 55% of the income. This system is based on "distributing" the money and guarantees a minimum pension. In other words, the young active people pay for the retired people.
Unfortunately, the French systemhas been in danger for many years and the people who were born between 1945 and 1952 may not benefit from the pension funds anymore when they retire. Despite the increasing longevity and the declining demography, the Left opposes the retirement age over 60. The opponents reject the investing process and the capitalization that mainly concerns people over a certain income like the cadres (executives) who get an extra retired pension (retrate complmentaire).
In France, every retired person benefits from a Social Security pension. Nobody can imagine the financial market could have an impact on the pension system. In 2003, Chirac's government succeeded in extending the increasing number of years to the public sector (from 37.5 to 40, then to 41 years in 2012 and 42 years in 2020).
Today, the talks between theMinister of LaborEric Woerth, the trade unions and the representatives of the employers (the MEDEF) are quite difficult as the participants have already disagreed on the main options and the leaders of themajor unionshave beentaking actions against the government.
The French government and the MEDEF want to raise the retirement age or prolong the contribution period whereas the Left and the Trade Unions would prefer to tax the employers. The richest people may pay tax on their earnings so as to finance the pension system and put an end to the criticism on the "bouclier fiscal" (tax cap)
How to Understand the Reform of the French Pension System?
By: Hlne Billiet
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