The 2023 pension reform is a government bill that aims to change the rules for retirement and the financing of the pay-as-you-go system. This bill has aroused a lot of opposition and demonstrations since it was presented in January 2023.
What are the main measures of this reform and what are the alternatives proposed by the unions and political parties?
The global pension reform
The bill provides for a gradual increase in the legal retirement age from 62 to 64 by 2030, at a rate of three months per generation starting with those born in 1961.
At the same time, the contribution period for a full pension will be increased to 43 years in 2027, starting with the generation born in 1965.
The long career system will be adapted with the creation of four age limits depending on the age at which the person starts working. People who have not contributed enough will be able to retire at age 67 without a discount.
Victims of an industrial accident or occupational disease will be able to leave at age 60.
The government justifies these measures by the need to ensure the financial equilibrium of the pension system in the face of an aging population and a declining number of contributors. It also claims that the reform will ensure equity between generations and between schemes.
Future rules for civil servants
The bill also plans to put an end to the special regimes enjoyed by certain civil servants and employees of public companies (SNCF, RATP, EDF, etc.). These regimes currently allow for earlier retirement or for calculating the amount of the pension on the last six months of salary instead of the best 25 years.
The government is proposing to abolish these advantages and to align the rules with those of the private sector.
However, it provides for transitional measures to accompany the agents concerned towards the new system. It is also committed to maintaining certain specific features related to arduous or dangerous jobs.
Social account forecasts
The bill is accompanied by a draft law on the rectifying financing of social security (PLFRSS), which forecasts the revenues and expenditures of the pension system for 2023.
According to the government, the system's deficit is expected to increase to -18 billion euros in 2023, mainly due to the health and economic crisis linked to Covid-19.
The PLFRSS therefore includes additional savings and revenue measures to reduce this deficit. These measures include:
--> an increase in employer and employee payroll taxes
--> a decrease in the ceiling of the family quotient
--> an increase in the social security rate on employee savings
--> a decrease in survivor's pensions
--> an increase in the CSG rate for wealthy pensioners.
These measures should reduce the deficit to -12 billion euros in 2023, according to the government.
Alternatives proposed by unions and political parties
Since the beginning of the debate on pension reform, trade unions and political parties have expressed their opposition to the government's plan and have put forward alternative proposals.
Among these proposals are:
--> maintaining the legal retirement age at 62 and calculating pensions on the basis of the best 25 years
--> taking into account the hardship of work and short careers
--> the revaluation of wages and pensions
--> the suppression of the exemptions of social contributions granted to companies
--> the creation of a social contribution on the financial income of companies and households
households
--> the fight against tax evasion and fraud
--> the creation of an intergenerational solidarity fund financed by a tax on financial transactions and capital income.
These proposals aim to increase the revenues of the pension system and to reduce inequalities between employees. They are supported by the CGT, FO, Solidaires, FSU and the left-wing parties (LFI, PCF, PS, EELV).
The parliamentary debate on the pension reform bill should begin on April 4, 2023 in the National Assembly.
The government hopes for a final adoption of the text before the summer. The unions are calling for continued mobilization and for a new interprofessional strike day on April 6, 2023.
But the text is not yet final, as it still has to pass the test of the Constitutional Council, which has been seized by several actors.
The Constitutional Council is the highest court in France, responsible for verifying the conformity of laws to the Constitution.
It has one month to render its decision, which will be published on April 14, 2023.
It can either validate the law in its entirety, or censure it partially or totally, or request modifications.
Three types of appeal have been filed with the Constitutional Council:
--> An appeal by the government, through the voice of Prime Minister Elisabeth Borne, who wants the Constitutional Council to examine all the points raised by the oppositions during the debates and confirm the legal soundness of the reform.
--> An appeal by the Nupes (Nouvelle union populaire écologique et sociale), a Left-wing union that has presented a referendum bill to affirm that the legal retirement age cannot be set beyond 62. This appeal aims to challenge the admissibility of the pension reform under Article 11 of the Constitution, which allows the people to decide by referendum on a proposed law.
--> The appeal by the Rassemblement National (RN), which challenges the constitutionality of the pension reform on several points, including the use of a law of rectifying the financing of social security (PLFRSS) to pass the text in emergency, the lack of impact study, the failure to respect the principle of equality and the confiscatory nature of some provisions.
The Constitutional Council will therefore have to decide on these various arguments and verify whether the pension reform respects the fundamental principles of the Constitution.
It is unlikely that it will censure the entire text, but it could modify certain aspects or refer certain questions to the legislator. In any case, his decision will be crucial for the future of the French pension system.
The 2023 pension reform is an ambitious and controversial project that aims to adapt the French pension system to demographic and economic changes.
The government is defending the idea of raising the retirement age and lengthening the contribution period to ensure the financial balance of the system and equity between the schemes.
The unions and political parties opposed to the project are proposing alternatives based on maintaining the legal retirement age at 62 and finding new sources of funding.
The parliamentary debate promises to be tense and the social movement continues. Will the 2023 pension reform be adopted?
What will be its effects on pensions and the purchasing power of retirees?
What will be the social and political consequences of this conflict?
These are all questions that remain unanswered and that are driving the public debate.
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