Govt and unions ready for pension reform battle

French President Nicolas Sarkozy invoked possible changes to his government's proposed reform of the state pension system as a poll showed two-thirds of French opposed to the measures and unions geared up for a June 24 demonstration.

By News Wires (text)

AFP -

The French system

When can you retire in France?

Anyone can draw a full pension in France at the age of 60 so long as they have paid social security contributions for at least 40.5 years. This is set to rise to 41 in 2012. At 65 anyone can retire on the full pension even if they have not worked the full 40.5 years. In some jobs, deemed especially wearing, it is possible to retire as young as 50.

How many pensioners?

According to the Labour Ministry, there are some 15.5 million pensioners in France, out of a population of some 65 million. This figure is set to rise to 18 million in 2030.

How generous are full pensions?

Public sector workers retire on 75 percent of their final six-month salary. Private sector workers get 50 percent of their earnings in the 25 best years, plus benefits from additional schemes.

How much do workers pay into the system?

Civil servants have 7.85 percent of their salary deducted each month for pensions contributions versus 10.65 percent for private sector workers.

How much does this cost the state?

According to the state Pensions Council, the annual pension deficit is forecast to reach 32 billion euros in 2010, then 80 billion in 2030.

Two-thirds of people in France say the government’s plans to raise the minimum retirement age are “unjust”, according to a survey for Europe 1 radio which was published on Friday.

The TNS-Sofres-Logica survey added that 68 percent said the government would not be able to balance the country’s pension deficit.

Earlier this week, the government said it would raise the retirement age to 62 from 60, as part of a reform aimed at salvaging the nation’s indebted pensions system and safeguarding its AAA sovereign debt rating.

The French pay-as-you-go pension system is forecast to register a deficit of 32 billion euros ($39.62 billion) this year. By 2050, with people living longer, the shortfall is expected to swell to more than 100 billion euros.

French trade unions are due to hold a new protest against the reform on June 24.