Hollande Backs Rise In Pension Contribution Period
19 June 2013
Posted by: Author: Ulrika Lomas
Author: Ulrika Lomas
Ahead of upcoming discussions with the country's social partners on pension reform, French President François Hollande has made clear that he has no intention of completely "starting from scratch" with the system.
In an interview with M6 television, French President Hollande insisted that such a radical pension reform would achieve nothing. Hollande nevertheless warned that state revenues will increase as a result of the overhaul.
Confirming plans to increase the pension contribution period in France, to take into account longer life expectancies, President Hollande explained that the speed of the rise would be determined following consultation with France's social partners. The French President categorically ruled out the idea of a rise in the legal age of retirement, currently 62.
The President refused to be drawn on other avenues currently being explored, namely the idea of a rise in the general social contribution (CSG) for pensioners, of revising existing tax breaks, and of increasing old age contributions. He did, however, indicate that the special pension regimes would be maintained, and hinted that the idea of a further alignment of public and private sector pensions has been dismissed.
The Government aims to draft its pension reform bill in September and to adopt the proposed text by the end of the year. France's social partners are due to convene on June 20, to discuss the recommendations of a committee report led by Yannick Moreau, serving as the basis of the Government's pension reform bill.
The project is vital to reducing the country's budget deficit to below 3 percent of gross domestic product. Failure to implement changes to the current system will result in a deficit in the pension fund estimated at between EUR20bn (USD25.8bn) and EUR25bn by 2020.