MEDEF, France’s powerful employers’ federation, has thrown down the gauntlet to the French government over reform of the country’s retirement system by voting overwhelmingly to withdraw from its 50-year administrative partnership with the unions in running France’s social security funds.
At the federation’s January 18 general assembly, members voted by almost 96% to end their participation in the social protection system – with a final date for action set at December 31 this year.
According to MEDEF, the time clause offers a mandate for negotiation with the government and social partners on “a new system of retirement contributions, avoiding any increase in contributions and allowing freedom of choice on retirement age and access to an optional capitalisation pillar”.
MEDEF also attacks the French government, claiming that it is confusing responsibilities between social partners and the state over social protection, as well as being unrealistic on the cost of future retirement financing.
A spokesperson for MEDEF points out that the action taken is designed to rebuild the French retirement system and bring about “dialogue to build the social protection of tomorrow”.
The controversial decision precedes a keynote declaration on social reform to be made this month by French prime minister Lionel Jospin, following new year discussions with both MEDEF and the unions.
Arnaud d’Yvoire at the Paris-based Observatories des Retraites, says MEDEF was also disappointed with the findings of a report published on January 12 by former government minister Réné Taulade.
The report: ‘L’Avenir des Systèmes de Retraite’, which received a positive vote from France’s Council of Economic and Social Affairs, came out against capitalised pensions schemes – except in the case of France’s retirement reserve fund – and also failed to address pension issues in the public sector. “It basically says if we have strong growth then there will be no problem,” says D’Yvoire.
He adds his belief that MEDEF is not serious about quitting the social partnership system, but looking to force the government’s arm.
However, D’Yvoire does not believe Jospin will capitulate. “In his speech Jospin will probably make some generous declarations about reinforcing the reserve funds. The fund currently stands at around Ffr2bn and will rise to Ffr30bn by the year-end. I suspect he will also propose the creation of an independent organisation to look at social security issues and he is also likely to announce measures softening the fiscal burden on early retirement .
“It shouldn’t perturb too many people, while all the same giving the impression that everything is being taken care of.” Hugh Wheelan