Wednesday, August 28, 2013

Pension Reform, Again

The Ayrault government has finally announced its long-awaited pension reform proposal. As one would expect from this government, it's a bit of a wet squib. The plan does nothing to reduce the opacity of the overly complex French pension system. It is entirely directed at trimming the deficit. I use the word "trimming," rather than, say, "eliminating," advisedly. There is not even a pretense that the increase in the system's revenues will be enough to restore equilibrium. But to get even this far, the government has been forced to ratify what the previous government (of the Right) did. It will reduce neither the payroll tax nor the number of quarters of contributions required to earn a full pension; in fact, it will increase both. Although the so-called "legal retirement age" of 62 is maintained (even though many who voted for the left wrongly believed that Hollande promised to reduce it to 60, where Mitterrand had put it long ago, they are wrong: he made no such promise), it is in large part a fiction that ought to be abolished. With the quarters of required contribution increasing from 41.5 years to 43 years by 2035, only those who begin work at age 19 and suffer no periods of unemployment will be able to retire at 62 with full pensions.

The proposed reform does break some new ground. There are provisions to assist workers in particularly arduous jobs, women, those who endure extended periods of unemployment, etc.

On the whole, however, this is a disappointingly timid effort. What is really needed is a sweeping reform to unify and clarify the entire system, so people know what they are paying in, what they can expect to get out at whatever age they choose to retire, and what options they have at every stage of their career. What they got instead is a reform that is carefully calibrated not to get anyone too angry, that will pare back the existing deficit by just enough to satisfy Brussels, and that makes a few gestures toward remedying the most serious inequities of the last several reforms. That's not nothing, but it's also not as much as one might have hoped from a government of the Left.


DavidinParis said...

Having arrived in France only 7 years ago (and paying French taxes to be sure!), I will never have the benefits that will sustain retirement so it is a moot point. Still, my question to you is what would you propose? In my mind, retirement at 60, 62, 65 should be voluntary for many job categories. It is nice to see so many 'young' people employed (in France I feel darn right old in my 50's) but even that is a canard.

cheapest rs gold said...

Possessing come to Italy simply Seven years back (as well as paying French fees to make certain!), I am going to not have the huge benefits that can preserve old age so it will be any moot point. Still, my query for your requirements is the thing that would you suggest? Over the internet, pension at 62, 62, 65 ought to be non-reflex for most job categories. It's nice to see numerous 'young' individuals used (inside Portugal I feel awful right aged within my Fifties) but actually that's a canard.

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