This past Tuesday the French government announced the eagerly anticipated pension reforms.
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The reformations are put in place due to an overwhelming deficit in the retirement pot. The country is struggling to relieve itself from its debt and these modifications are the first proposed stages in doing so.
As an increase in the retirement age has never been received well by the French, this year’s changes aimed to stay away from such strategies considering that they have constantly failed.
The main change will be an increase in contributions from both the employers and employees to the pension fund. These contributions will both be made in equal measure and this change is set to begin as early as the first months of 2013.
In addition, by 2035 it is expected that the number of years contributed will increase by 2 from 41 to 43 years of service.
These two main reforms together, in addition to the rapid population growth of France aim to balance all debts by 2040. These changes to the nation’s pension will inject approximately 7.3 billion euros a year into the pension pot.
As expected, these changes have not been received well by the general population and protests have already been scheduled for the 10th of September.
Union representatives claim that France has grown to become increasingly competitive since the recession and with unemployment on the rise this is not good news.
Companies will be even more reluctant to hire employees than absolutely necessary due to the increase in contributions planned for next year.
In addition the union reps have asserted that taxing the citizens of France is always the first option that the government leans toward and this will no longer work.
However, Hollande and his party are attempting to implement positive reforms for France’s future pensioners.
They are hoping to introduce a new retirement scheme for the more difficult types of work which include night shift jobs. This is set to start as soon as 2015.
In addition, they are looking to improve the inequality of pensions between men and women and hope to, ultimately, reach an equilibrium.
Finally, they will not be charging any additional labor tax in attempts to pacify the masses. It seemed that this was not enough and they have yet to respond to the impending protests.
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