PARIS, Jan 10 (Reuters) – As Emmanuel Macron prepares to reform the pension system, here is a retrospective of the various reforms of the basic system proposed by governments since the beginning of the 1990s, a period in which the question of the financial sustainability of the scheme begins to arise.
*1993: FIRST PARAMETRIC REFORM
Faced with the “great financial difficulties” that the general scheme and its three aligned schemes were to experience in the long term (agricultural workers, craftsmen, industrialists and traders), the government of Edouard Balladur is proposing three key measures.
The first provides for an extension of the contribution period required to obtain a full pension from 37.5 to 40 years. The second aims to change the reference period of the average annual salary used as the basis for calculating the pension. The 25 best years of career are thus taken into account in this calculation and no longer the 10 best. The third aims to index pensions to inflation and no longer to wages in order to limit their progression.
The reform generates little protest in the street with regard to the importance of the changes adopted. One of the reasons could be that it does not concern the civil service, where trade unionism is more rooted.
1995: ATTEMPT TO REFORM THE SPECIAL REGIMES
Prime Minister under Jacques Chirac, Alain Juppé proposes a reform of special regimes as part of an overhaul of Social Security. He would like the contribution period necessary to obtain a full pension from these schemes to be aligned with that of the private sector.
But he withdrew his project in the face of the harshest social protest since May-1968, with more than three weeks of strikes which paralyzed the country, a few days before the start of the Christmas holidays. On December 12, 2.2 million demonstrators marched in the street, according to the organizers, one million according to the police.
*2003: REFORM OF THE PUBLIC SERVICE REGIME
Faced with the threat of a deficit of 43 billion euros by 2020, Jacques Chirac’s Minister of Social Affairs, François Fillon, is extending the contribution period required to obtain the full pension of civil servants to 40 annuities, is the same as for private.
Its reform provides for this period to be subsequently extended to 41 years for all French people from 2009.
The reform also indexes the pensions of civil servants on prices and no longer on the point of the civil service. A system for early departure for long careers has been created, as well as a mandatory additional point-based scheme for civil servants.
On May 13, 2003, two million people according to the unions, 1.13 million according to the police, said “no” to this retirement which was nevertheless adopted.
*2008: REFORM OF SPECIAL REGIMES
The 2008 reform, also led by François Fillon, then Prime Minister under the presidency of Nicolas Sarkozy, aims to apply to special schemes the rules in force in the public service since 2003.
This reform led to the gradual increase in the contribution period from 37.5 years to 40 years and then from 2017 to 41 years, the introduction of a discount/surcharge mechanism and the indexation of pensions on the evolution of prices and no longer on that of the salaries of public officials in service.
The protest, strong at first, calmed down after long discussions, Raymond Soubie, former social adviser to Nicolas Sarkozy, told Reuters.
According to the Court of Auditors, the implementation of this reform was nevertheless accompanied by significant wage compensation measures negotiated within each of the companies which limited the impact on financing in the short term.
“Nicolas Sarkozy preferred to pay salary increases – in the short term – which allowed him to begin to reform the pension systems in the long term”, explained Raymond Soubie.
*2010: PASSAGE TO 62 YEARS
A new reform under Nicolas Sarkozy in 2010 allowed the gradual raising of the minimum retirement age from 60 to 62 for all insured persons, including those in special schemes but with different timetables for implementation.
The age of cancellation of the discount is increased from 65 to 67 years and the contribution period required to obtain a full pension increases slightly to 41.5 years.
In return, early departure schemes are created for people who worked before their 18th birthday and for employees who are permanently incapacitated.
The protest is lively in the street. Some 3.5 million people beat the pavement at the height of the mobilization, according to the unions, more than a million according to the police. The project is nevertheless adopted.
Nicolas Sarkozy was then very firm on the method. “There was never anything to discuss. Nicolas Sarkozy said: ‘take it or leave it’. There were informal contacts but no discussion, so he did not vary from one thumb on his project. Opposite, the hostile movements were a little disconcerted”, said Raymond Soubie.
* 2014: EXTENSION OF THE DURATION OF CONTRIBUTION In 2014, the reform carried out by Marisol Touraine, minister under the presidency of François Hollande, increases the duration of insurance necessary to obtain a pension at full rate to 43 years from the generation 1973 , i.e. in 2035.
The reform also creates the personal hardship account (C3P) which allows certain employees exposed to hardship factors to have access to gradual or early retirement and includes certain improvements such as taking into account maternity leave or periods learning in the calculation of the retirement pension.
The reform enjoys the support of reformist unions, such as the CFDT. The demonstrations mobilize between 370,000 people in the street, according to the unions, and 155,000 people, according to the police.
* 2017: THE IDEA OF THE UNIVERSAL POINTS SYSTEM
In 2017, Emmanuel Macron has the ambition to create a universal point-based pension scheme to establish a common framework for all French people, regardless of their status.
The reform, which initially has the support of the reformist unions, will be strongly contested by all the trade union organizations when the idea of a “pivotal age”, encouraging retirement at 64, will be raised. .
The bill tabled in the National Assembly in January 2020 will finally be abandoned, officially, due to the emergence of the coronavirus pandemic.
According to several architects of this reform, the project no longer had the necessary political support in the face of the contestation to which it was subject.
On December 5, nearly 800,000 demonstrators, according to the police, 1.5 million according to the unions marched in the street. The strike movement, very important in transport, has spread to other professional categories, such as lawyers or even dancers at the Paris Opera, etc. (Written by Caroline Pailliez, edited by Blandine Hénault)