PENSION REFORM. The government is considering raising the legal retirement age and extending the contribution period. Here is the summary of the project.
[Mis à jour le 20 janvier 2023 à 10h48] The pension reform project carried out by Prime Minister Elisabeth Borne aims in particular to raise the legal retirement age from 62 to 64 to rebalance the pay-as-you-go system, in slight deficit for the year 2023 (from 0 .5 to 0.8 point of GDP). A point strongly criticized by the opposition. For this, the government plans to extend the contribution period to 43 annual installments, and 172 quarters to benefit from a full pension. The increase in the amount of the minimum pension to 85% of the minimum wage, as well as the creation of a new threshold (at 18) to allow as many people as possible to benefit from the long career scheme is also on the agenda. The text will be presented on Monday, January 23 in the Council of Ministers, then will pass before the National Assembly in early February, before coming into force this summer?
The pension reform should indeed be integrated into a future bill on the amending financing of Social Security (PLFRSS). An asset for the government which should thus be able to benefit from unlimited recourse to 49.3 as is the norm in the texts concerning the budget. Normally, this famous 49.3 can only be used once per parliamentary session. With such a device, the government will have the possibility of drawing the famous 49.3 on the various points of friction, from the postponement of the legal retirement age to the arduousness, through long careers, even if, a priori , he shouldn’t need it, the Republicans seeming rather ready to cooperate despite some reluctance.
On Thursday January 19, we also learned that the pension reform project presented on January 10 by Elisabeth Borne was perhaps not yet finalized, as evidenced by these revelations from the World : “The government has transmitted to the Council of State a second version of the bill relating to the reform of pensions. The text is longer than the first version, with twenty articles, against ten initially”. We also learned that details could be added to the text concerning the financial balances of the different branches of Social Security. The deficit could be widened by 400 million euros, due to new support measures as part of the 2023 pension reform.here are the 8 points to remember concerning the pension reform project:
- Increase in the legal retirement age from 62 to 64 years old
- lengthening of the contribution period at 43
- Creation of a minimum pension at 85% of minimum wage : nearly 1,200 euros
- New device on long careers (early departure)
- Better consideration of arduousness (extension of C2P)
- Towards an abolition of certain special diets (RATP, IEG)
- Creating a “index of seniors“in the interests of professional equality
- The age ofcancellation of the next to stay at 67 years old
The government wants to implement this new 2023 pension reform to ensure the survival of the pay-as-you-go pension system dear to France. The executive relies first of all on theincreased life expectancy. We live longer, so we can work a few extra years. the number of retirees, it is growing faster than the number of assets. And this figure is expected to increase steadily in the years to come. 16.8 million retirees in 2020, and up to 23 million in 2070. A big acceleration should be felt around 2040 with the retirement of the baby-boom generations. Problem, these are the assets that contribute to pay pensions for retirees. Hence the wish for the government to “rebalance” this pension system which requires greater funding.
After the transition from 60 to 62 in 2010 (Woerth reform), Emmanuel Macron wishes to move to 64 years old with an acceleration of the contribution period, which will reach 43 years and 172 quarters. It’s here generation 1968 who will be the first to have to wait until age 64 to benefit from a full pension. Are you concerned? Here is the new legal starting age, based on your year of birth:
- Generation 1961 : 62 years and 3 months, in 2023
- Generation 1962 : 62 years and 6 months, in 2024
- Generation 1963 : 62 years and 9 months, in 2025
- Generation 1964 : 63 years old in 2026
- Generation 1965 : 63 years and 3 months, in 2027
- Generation 1966 : 63 years and 6 months, in 2028
- Generation 1967 : 63 years and 9 months, in 2029
- Generation 1968 : 64 years in 2030
The “long career” system already allows those who started working young to retire earlier. According to government announcements during the presentation of the pension reform on Tuesday, January 10, those who have had a long career will still be able to retire before age 64. In detail, if you have validated at least five quarters before age 20 (with 44 years of contribution and 172 quarters), it will be possible to retire at:
- 58 years old : if you started working at 14 years old
- 59 years old : if you started working at 15 years old
- 60 years : if you started working at 16 years old
- 61 years old : if you started working at 17 years
- 62 years old : if you started working between 18 and 20 years old
For more than three years, the abolition of special diets has been in the government’s small papers. Faced with the rumble of contributors to special plans, the latter has reviewed its copy. It plans to prohibit access to special schemes for new hires in the trades concerned. In other words, the old ones will keep their special regime, but the new ones will no longer have access to it. The limit is as follows: to remain attached to his special scheme, the employee must be less than 17 years from retirement, in 2020. This is the famous “grandfather clause“. Please note that the increase in the legal retirement age should start a little later for these special schemes. The 2010 Woerth reform, which raised the legal retirement age from 60 to 62, will only be fully effective in 2024. The companies employing these employees could therefore be forced to establish a period of convergence with the other schemes.
With the 2023 pension reform, policyholders linked to a special scheme will retain their benefits, for the vast majority if they were born before January 1, 1975. For employees of the RATP, SNCF, Bank of France, IEG and the state workersbefore the January 1, 1980. For the miners and drillersbefore the January 1, 1982. The Paris Opera dancersthem Dockersand the French comedy them will not be impacted. This special diet should not move one iota. It should be noted that in the public service, the advantageous method of calculating the retirement pension, which consists of basing it on the last six months of the career (often the best paid) against the best 25 years for the private sector, should be kept. .
Thing promised, thing due? Emmanuel Macron had made it one of his campaign promises. From September 1, 2023, the minimum pension will indeed increase, according to government announcements this Tuesday, January 10, to around 1,200 euros per month for new retirees, or 85% of the minimum wage. To be able to respect this principle, the minimum pension will now be indexed to the minimum wage and no longer to inflation. Employees, craftsmen-traders and farmers will be concerned. What about people who are already retired? Will they see their pension increase? The government has, on this point, referred to new consultations with the unions and the political groups.
Hardship at work is one of the government’s priorities in this 2023 pension reform. In this logic, access to C2P (prevention professional account) should be extended to new employees, more than 60,000 more per year, the government said on Tuesday. This system makes it possible to accumulate points so as to leave earlier in retirement, according to six criteria of arduousness: night work, work in alternating successive shifts, repetitive work, activities in a hyperbaric environment (under water, nuclear reactor containment), extreme temperatures or even noise.
In view of the government’s announcements on January 10, the carrying of heavy loads, painful postures and mechanical vibrations, three criteria of hardship at work which had been abandoned in 2017, were finally not reinstated as the unions. Nevertheless, the employees concerned will be offered “reinforced medical monitoring” from mid-career, it was reported. On medical advice, these same employees may obtain an adaptation of their position and/or working time. They will also be able to benefit from enhanced access to retraining. In the most critical cases, an early departure from the age of 62 may finally be offered to them.