FRANCE – A report released by a pensions advisory panel and commissioned by the French government recommends a series of measures – including a limit on indexation – for industry reforms president François Hollande is expected to tackle before year-end.
In December last year, a report from the pension steering committee, the Conseil d’Orientation des Retraites (COR), argued that the previous pension reform introduced in 2010 was not enough for France to tackle its deficit by 2018 as previously expected.
Following the announcement of the COR’s conclusion, Hollande’s government asked an independent advisory panel to work on a series of recommendations to further reform the French pension system, which could see its deficit increase to €18.8bn in 2017, according to the government.
In its final report released today, the advisory panel made similar recommendations to the measures already introduced with the pension reforms of 2003 and 2010.
The measures include a further increase in the period of contributions, tax rises for pensioners and an increase in the level of contributions.
However, the panel also recommended a limit on the indexation of pensions, which would lead the most wealthy retirees, already paying as much as 6.8% of general social contribution (CSG) in tax, see their pensions fall by 1 percentage point compared with inflation.
The CSG, introduced in 1990, aims to fund health insurance family benefits and the Retirement Solidarity Fund (FSV).
The French government said it would study the proposals released today but was “not bound by them”.
The recommendations come a week after the European Commission urged France to adopt a number of fiscal measures to revive its economy.
The Commission’s move was part of an additional reprieve granted the French government to bring the deficit under the EU limit of 3% of GDP.