France mulls pension changes to give laborers more say over when they retire

Reuters News
Posted: Aug 13, 2013 10:35 AM
France mulls pension changes to give laborers more say over when they retire

VELIZY-VILLACOUBLAY, France (Reuters) - France's government is mulling a points-based retirement credit system rather than a years-of-work tally for people in tough physical jobs, to give them more say over when they retire, Prime Minister Jean-Marc Ayrault said on Tuesday.

Any special credits for laborers are likely to be financed by rises in social welfare contributions, details yet to be worked out by a Socialist government which plans to reform the retirement system to help fix a ballooning pension deficit.

It aims to submit the plan to parliament in the weeks ahead.

Some Scandinavian countries use points-based pension systems praised for their transparency and simplicity and for allowing more flexibility for people who, for example, switch careers often or take time out to care for children or the elderly.

Visiting the construction site of a new tramway into the capital at the town of Velizy-Villacoublay, southwest of Paris, Ayrault said those in strenuous jobs could clock up points that would win them extra months of credit in the retirement system.

He said the government wanted to help those in physical jobs that involved overnight shifts such as the tramway laborers who had worked through the night drilling an underground tunnel or people exposed to toxic chemicals.

"If we want our French social model to live on, we have to take into account the high expectations of workers, in particular those who work in onerous conditions," Ayrault said.

The reform, closely watched by international investors and France's European partners, is expected to accelerate a process already under way to lengthen the mandatory pension contribution period to 41-1/2 years or more by 2020.

A government-commissioned panel has advised acting soon to extend that period to up to 44 years, while proposing other measures such as making well-off pensioners pay more tax.

Ayrault said the government planned to meet trade union leaders on August 26 and 27 to discuss the last details of the reform before presenting it a September 18 cabinet meeting.

President Francois Hollande is reluctant to extend the legal retirement age after opposing conservative Nicolas Sarkozy's 2010 reform to raise it by two years to 62 and then reducing it in 2012 for people who start work young in tough physical jobs.

(Reporting by Julien Ponthus; Writing by Catherine Bremer; Editing by Louise Ireland)