Monday

26th Feb 2024

Opinion

Macron’s plan to raise pension age to 64 might just work

  • In a concession to opponents, Emmanuel Macron would not raise the pension age to 65, and phase-in the increase to 64 over a period of seven years (Photo: consilium.europa.eu)
Listen to article

Emmanuel Macron's government has proposed to raise France's pension age from 62 to 64 and abolish sweetheart pension deals that allow public-sector workers to retire in their fifties.

It's about time. France is late to raise its retirement age. If it waits even longer, younger generations will be left with the bill.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

In a concession to opponents, Macron would not raise the pension age to 65, and phase-in the increase to 64 over a period of seven years.

Those who started work before the age of 20 would still be able to retire early. Workers with disabilities could retire at 55. Macron is also increasing minimum state pensions to €1,200 per month.

He has canceled his plan to merge France's 42 occupational pension funds, which are run by employers and trade unions, into a single points-based system. Only the plans for the Bank of France, the state-owned energy sector and the Parisian public transport company would be phased-out by refusing new members.

Their extremely low retirement ages, ranging from 52 to 57, bring down the average French retirement age to 60 for men and 61 for women.

Mothers who interrupted their careers to raise children, on the other hand, and who don't have money saved to retire early, must work into their mid-60s to make up for the years they didn't contribute to a pension scheme.

Macron would rectify those injustices, which date from an era when life expectancy was lower and few women worked, by raising the retirement age for everyone and awarding pension rights for maternity and paternity leave in addition to work.

Trade unions still call the increase to 64 years of age "brutal". They should count their blessings. The Netherlands has raised its pension age to 67. By the time the French reach 64, in 2030, the German pension age will be 67 as well.

Young retirement, long life

The low French retirement age is especially hard to justify when French life expectancy at birth is among the highest in the world: 80 for men and 85 for women.

Since pensions are funded by active workers, the alternative to raising the retirement age is raising pension contributions. Currently workers pay seven percent of their salaries to the state pension fund and three to eight percent to an occupational pension plan. Employers also pay a share. That adds up to an effective rate of 28 percent on average earnings, the highest in the rich world after Italy.

France has 17 million retirees, a quarter of the population. By 2040, there would be 20 million pensioners. The working population is projected to remain stable at 30 million.

Twenty years ago, there were two workers for every retiree. That has fallen to 1.7 and would drop to 1.4 by the middle of this century.

Inevitably, the pension fund has sunk into the red. A deficit of €13.5 billion is projected by 2030.

With an increase of the age to 64, the system should be back in the black by then.

Author bio

Nick Ottens is the editor of the transatlantic opinion website Atlantic Sentinel and a columnist for the Netherlands' Wynia’s Week.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

Investigation

How Europe's pension funds are gambling with food prices

Some of Europe's largest pension funds are investing billions of euros in volatile commodity markets, risking the hard-earned income of millions of workers while fuelling a global hunger crisis caused in part by such investments, a new investigation has found.

Police violence in rural French water demos sparks protests

Protests are planned in 90 villages across France on Thursday to protest against escalating police violence that have left 200 people injured, including two people who are still in a coma, after a violent clash in Sainte-Soline over 'water privatisation'.

Ukraine refugees want to return home — but how?

Fewer than one-in-ten Ukrainian refugees intend to settle permanently outside Ukraine, according to new research by the associate director of research and the director of gender and economic inclusion at the European Bank of Reconstruction and Development.

Latest News

  1. Angry farmers block Brussels again, urge fix to 'unfair' prices
  2. Luxembourg denies blind spot on Nato security vetting
  3. Record rate-profits sees EU banks give shareholders €120bn
  4. Why the EU silence on why Orban's €10bn was unblocked?
  5. Far-right MEPs least disciplined in following party line
  6. More farmers, Ukraine aid, Yulia Navalnaya in focus This WEEK
  7. EU rewards Tusk's Poland on rule of law with €137bn
  8. UK-EU relations defrosting ahead of near-certain Labour win

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Stakeholders' Highlights

  1. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  2. UNOPSFostering health system resilience in fragile and conflict-affected countries
  3. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  4. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  5. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  6. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA

Join EUobserver

EU news that matters

Join us