French Assembly Adopts Pension Reform Bill

by Ulrika Lomas, Tax-News.com, Brussels

17 September 2010

The French National Assembly has adopted the government’s pension reform bill, following a heated debate, controversially cut short by its president Bernard Accoyer. The outcome paves the way for a difficult debate in the French Senate.

Presented by French Labour Minister Eric Woerth, the bill, which aims to progressively increase the legal age of retirement from 60 to 62 by 2018 and to increase from 65 to 67 the age at which entitlement to a full pension is granted, was adopted by 329 votes to 233. While members of both the Union for a Popular Movement (UMP) party (excepting abstentions from supporters of former French Prime Minister Dominique de Villepin) and the New Centre (NC) party voted in favour of the bill, left-wing groups voiced their opposition and voted against.

The adopted text contains the various modifications to the government’s original bill announced recently by the French President Nicolas Sarkozy. Designed to take into consideration certain hardships in a bid to ensure that the reform is fair, these concessions include plans to maintain and extend the initiative pertaining to those with long careers (le dispositif carrières longues). Consequently, anyone who entered the job market before the age of 18, having paid their required pension contributions will be entitled to retire at the age of 60, if not before.

Welcoming the outcome of the vote and referring to a good debate, Labour Minister Woerth emphasized the fact that an important step had been taken.

Yet much work remains to be done. President Sarkozy himself is anticipating further problems, and indeed insinuated recently to senators that there could be scope for adjustment in the bill, while remaining firm on its major measures which represent around EUR20bn in additional revenues for the state.

The French Senate is due to examine the text from October 1, and after the vote, a joint commission (une commission mixte paritaire – CMP) will be convened to finalize a text that will then be presented to both assemblies for definitive adoption. The government aims to adopt the reform by the beginning of November.

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