French government slated over pensions policy
FRANCE – Pre-election promises to pump €152bn into the state reserve fund and introduce long-term reform to France’s pension system are likely to amount to nothing, says Arnauld d’Yvoire, general secretary of Observatoire des Retraites, the Paris-based pensions association.
D’Yvoire claims the current economic climate and union influence will ensure the promises remain hollow and upcoming elections will again prevent any progress being made in the pensions debate for at least another six months.
“Declining equity markets and France’s internal budgetary restraints mean there isn’t spare cash to go into the state reserve fund and forthcoming ‘tribunal committee’ elections mean once again all is quiet on the pensions front,” he says.
The tribunal committee elections come round every five years when employers and employees elect members that try to resolve areas of conflict between employers and employees, including retirement income and benefits issues.
“This is obviously an area where the unions get involved and given the strength of unions in France the tribunal elections have ‘political’ significance,” D’Yvoire says.
Overall, D’Yvoire believes the new government has very little idea how to approach pensions and is skirting around the issue at the heart of the debate- the age of retirement.
“Extending the retirement age is what any pensions reform here is based on, since it’s the obvious first step in dealing with demographic changes. Once that is done, we will have a clearer idea of what else needs we need to change.
“The government’s stance on the retirement age is ambiguous. It has made it clear it will not legislate to extend the retirement age beyond 60 but then says, though we don’t know how, that it supports and encourages those that choose to remain in work after 60. I don’t think this government has a clue about pensions,” he explains.
D’Yvoire says all the government can realistically do at the moment is encourage people to save more by introducing tax-breaks to company savings schemes but it could do more.
“The unions and employers are due to meet in the coming weeks to discuss a range of issues including pensions. But the discussions have no legal standing. I would like to see these discussions become three-way with the government’s participation,” he says.