Pension reform: towards a postponement of the age or the contribution period?

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Encourage the French to work more. This is the government’s goal. The executive intends to achieve it by reforming pensions, in order to maintain the intergenerational social system in balance and anticipate the demographic revolution due to the acceleration of the aging of the population in France. During his campaign, Emmanuel Macron repeatedly recalled his key measure to achieve this: to postpone the retirement age to 64, or even 65 years. However, due to the controversy and tensions created by this track, the discourse has since become more flexible.

As Prime Minister Élisabeth Borne declared this Sunday, May 22 in the columns of the JDD, retirement at 65 is not yet fixed. Different hypotheses are still under study. Moreover, Olivier Dussopt, Minister of Labour, briefly mentioned the current thoughts of the government on this subject, at the microphone of RTL, this Tuesday, May 24.

The rescue of pension plan finances will not necessarily involve a postponement of the pivot age. If there will indeed be a pension reform, the government wants to negotiate with employers and unions next September or October. “We will include the timetable for this reform and its preparation, as part of the government’s action plan. The President of the Republic has given us a month to arrest him,” said Olivier Dussopt.

When the postponement of the legal age is mentioned, the fog appears. “Today there is a lot of hypocrisy in all this because the reforms already passed increase the contribution period. This is an objective that is already contained in the texts mechanically by extending the contribution period”, added the Minister.

Because, yes, a reform is already underway…

The 2014 law, called the Touraine reform, was introduced to extend the contribution period by one quarter every three generations. (and not the pivotal age) to obtain the full rate. The aim of this measure, initiated by the Minister of Social Affairs – Marisol Touraine – under the mandate of François Hollande, remains the same: to encourage workers to work longer.

People born between 1958 and 1960 are the first generations concerned. They must contribute 167 quarters (41 years and 9 months) to obtain a full pension. People born from 1961 to 1963 must validate 168 quarters and those born from 1973, 172 quarters (i.e. 43 years). Its effects will be fully felt by 2035, when the generation born in 2035 can begin to retire, recalls Capital.

The effect of postponing the age is more rapid, since, even if the threshold is raised gradually, an entire generation will be affected at the same time and will have to work until the age of 64 or 65.

However, in the event of an extension of the contribution period, the French keep control of their departure date. They can therefore leave from the age of 62, without having reached the full rate. However, they will suffer a discount. In order to assess the level of savings needed, the government will be able to rely on the annual report of the Pensions Orientation Council (Cor) which will be published next month.

As for special diets, they should be abolished. “It is an axis of negotiation to say that we are not raising the legal age of departure to 64 or 65 years but on the other hand that we are abolishing the special regimes. I think they will use it for that”, warns a connoisseur of Olivier Dussopt’s negotiation methods.