France Lowers Retirement Age

François Hollande (center) with Marisol Touraine (right) and Loïg Chesnais-Girard (left)
Photo: Lucas Désiles

In 2010, former President Nicolas Sarkozy raised the retirement age from 60 to 62. During his campaign, President François Hollande promised to lower the age back to 60, beginning with the people who have jobs considered to be difficult and who began to work early in their lives, and then to lower the age for everybody.

The French retirement system is similar in concept to the idea of Social Security in the United States: throughout their whole working life, people give a part of their incomes to the State in order to receive money each month when they retire.

Social Affairs Minister Marisol Touraine presented a new decree on June 6, 2012 that widens retirement rights to a large part of the population. Around 111,000 people would be affected by this measure. All people who began work at 18 or 19 and who paid 41.5 years of contributions would be able to fully retire at 60.

The new program will cost the State €1 billion, and the cost will rise to €3 billion by the end of Hollande’s presidency. This proposal is far less, however, than the €5 billion plan brought up by the Parti Socialiste (PS) during the campaign.

The measure will be financed by a contribution increase of 0.2% in 2013. This means only €1.40 per month in 2013 for someone earning minimum wage in France. In 2017, the monthly contribution would increase by €3.40 per month.

The President, as expected, made the first step in implementing the measure. Unions and the general public do not believe enough is being done, however. There is a common desire for the retirement age to be 60 for everyone. The problem remains the way of financing the measure, because the deficit of the retirement fund is already estimated at €15 billion. The number is disputed, but the fact remains that the deficit is substantial.

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