Despite widespread social unrest and a united trade union movement, the government has managed to pass an amending finance law for the social security system, which is designed to reform the country’s retirement pension arrangements. The government used a provision of the Constitution (Article 49.3) to make this bill an issue of its responsibility, and the reform was deemed to be approved on 20 March. Before it can enter into force, it must be promulgated by the French President, provided that, on 14 April this year, the Constitutional Council rules that this law is not in breach of the Constitution (see press release). The main measures are as follows:
1/ Starting on 1 September 2023, the legal retirement age will be gradually raised to 64, at the rate of an additional three months per year, based on a person’s year of birth, until it reaches 64 in 2030.
2/ Speeding up the timetable stipulated by the previous pension reform for extending the term of the pension contributions payable in order to qualify for a full pension. The 43 years’ worth of contributions will now be required with effect from 2027 (instead of 2035), representing an increase at the rate of three months per year (instead of three months once every three years).
3/ The age at which contributors can take a full retirement pension (without any reduction in payments being applicable), will remain at 67.
4/ Various measures are being introduced to adapt the arrangements for employees who have had a long career and those taking early retirement.
5/ Several special regimes are being abolished for new recruits (e.g. those previously applicable to the RATP [Paris Transport Authority], the electricity and gas industries, etc.).
6/ A minimum pension is stipulated for employees who have completed a career of full-time work.
7/ To encourage the employment of older workers, the law provides for a “seniors index” that will require companies to evaluate their current practices in terms of retaining (and recruiting) older workers, similar to the existing gender equality legislation.
The law imposes an obligation on the social partners to negotiate a national agreement on employment of older workers. If this agreement is not reached, the government will experiment with a specific (‘CDI senior’) contract of employment, i.e. an ‘older worker’s permanent contract’, on which lower social security contributions are payable.
