French pension reform offers incentives to work until age 64
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The age when French citizens can receive a full pension should be put back to 64 from 62 now, the government's special adviser on pension reform said on Thursday.
In a report, Jean-Paul Delevoye said workers could still retire at 62 as promised by President Emmanuel Macron during his campaign, but they would have to work two years longer to draw a full pension without any discount in a new system due to take effect in 2025.
The reform, which aims to unify 42 different schemes into a single, points-based system, is potentially explosive.
Private pension plans are little used in France and so most workers draw their pensions from the compulsory state-backed system.
Labour unions have a record of opposing changes to pensions, often sending millions onto the streets to protest.
On Thursday, two hardline unions, FO and CGT, called for strikes on Sept. 21 and 24.
"This system is all smoke and mirrors," Philippe Martinez, leader of the Communist-backed CGT union, which has long commanded support from government employees and workers at power plants and railways.
"The message we're sending to workers today is that we should mobilise."
Two years into his presidency, Macron is keen to relaunch his reform agenda after spending several months rebuilding political capital and trying to quell anti-government "yellow vest" protests.
The former investment banker lost little time in his first months in office overhauling a strict labour code to make it easier to hire and fire, as employers had long urged, and also brought in tax cuts for investors and companies to encourage investment that would create jobs.
But plans to reform unemployment insurance were only unveiled in June after months of delay, and the government is now treading carefully with the pension overhaul, which is not expected to pass parliament before the end of the year.
Prime Minister Edouard Philippe was careful to flag negotiations with unions, in contrast with the first raft of reforms, which Macron rammed through parliament via decrees, infuriating even the most reformist unions.
"A new phase to listen and consult social partners and citizens will start on this basis," he tweeted.
Merci à M. @Delevoye pour son rapport sur la réforme des #retraites, issu de concertations avec les partenaires sociaux et les citoyens. Une nouvelle phase d’écoute et de concertation va s’engager sur cette base, pour parvenir à un système plus juste et plus lisible pour tous. pic.twitter.com/9KqVgVF2Y5Edouard Philippe (@EPhilippePM) July 18, 2019
However, Delevoye is a close Macron ally, and people close to him say his recommendations are in line with what the president wants and are unlikely to change much in the bill.
The reform is especially aimed at the "special pension regimes" of the state railway operator SNCF, the Paris metro company RATP and state utilities such as EDF, whose pension plans receive 5.5 billion euros ($6.2 billion) every year from taxpayers to plug their chronic deficit.
Laurent Berger, leader of the reformist CFDT, France's biggest union, said Delevoye's recommendations were "only a report", suggesting that he expected some flexibility.
"The CFDT will offer an opinion once we are presented with a bill," he said. "This report is just one step."
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