In order to find the €20.7 billion it will need by 2020 to pay for pensions, the French government has decided to do another pension reform, amending old-age contributions and the duration of insurance. Effective retirement age is de facto going to increase; the gradual retirement system will be improved and an individual hardness prevention account will be set up, allowing employees to retrain or retire earlier. It will be funded by two new employers’ contributions. Most of these measures are contained in a bill, “guaranteeing the future of pensions,” presented at the Council of Ministers meeting of September 18. The bill is due to enter Parliament on October 7. Here are the key changes. (Ref. 130553)
Higher pension contributions. The Prime Minister announced that employees and employers’ contributions to old-age insurance will be raised via a decree, with the same shares and gradually over 4 years: 0.15 point in 2014 and then 0.05 point per year for the next three years. In the end, in 2017, the total increase will amount to 0.3 point for workers and 0.3 point for employers. Currently, old-age contributions amount to 15.15 percent: 8.40 percent for employers and 6.75 percent for employee
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