The Place de la Concorde in Paris recently witnessed a heated confrontation between protesters and police. The reason for the conflict is the government’s decision to change the state retirement age. Under the new change, the state retirement age rose from 62 to 64 years. This means people would have to work longer to receive a full state pension.
Previously, protests had been mild and peaceful. Since the beginning of the year, the demonstrations that have taken place around the world fight against the new change in a fairly peaceful way. However, peaceful protests recently turned into full-blown riots on March 16, shortly after President Emmanuel Macron’s administration used a special provision in the Constitution to push through pension reform without holding a vote in the National Assembly. It is important to note that Emmanuel Macron’s administration does not have a majority in the National Assembly. During the protest, opposition politicians sang the French national anthem and placed protest signs in Parliament.
The new pension reform
In France, everyone receives a state pension after retiring. How is this pension financed? Well, the mandatory payroll taxes paid by people currently working in different sectors are what finance the retirement pension. This provides a pension that is insured and backed by the State.
However, the government wants to tweak state pension provision a bit. The State considers that life expectancy in France is increasing. This implies that in the future there will be more of the aging population in France, even more than new entrants to the workforce. This would mean that the current pension system will fall short in the coming decades.
According to administration estimates, in 2000 there were 2.1 workers contributing funds to the system for each retiree; the number decreased to 1.7 workers per retiree in 2020. In addition, there was a further drop to 1.2 each year. It is expected 2070. According to the Government, the measure of gradually increasing the legal retirement age by three months until reaching 64 years in 2030 is actually “indispensable” to balance the pension system without compromising its financial viability.
It was decided to use special provision 49:3 of the Constitution as a last minute call. In this regard, the Prime Minister of France, Elizabeth Borne, expressed: “We cannot play with the future of our pensions. This reform is necessary.”
What does this new change mean?
The new pension reform increases the retirement age from 62 to 64 years. This means that the French will have to pay payroll taxes for a few more years than usual. In simple terms, it means that people will now have to work longer. The new pension plan also means that there will be a gradual increase of three months each year until the year 2030. Suppose a person is born in 1961 and will retire in 2023. Now, due to the new pension reform, this person I have to work 3 more months to receive the state pension.
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Source: ptivs2.edu.vn