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French National Assembly Waves Through Pension Bill

by Ulrika Lomas,, Brussels

24 December 2013

The French National Assembly has definitively adopted the Government's pension reform bill.

While members of French President François Hollande's Socialist Party (PS) and radical left groups voted in favor of the draft legislation, the Left Front, the Union for a Popular Movement (UMP), and the centrist UDI parties voted against. The ecologists abstained from voting.

Although one of the Government's key reforms, the pension reform bill has been criticized from the outset, with opponents including the European Commission arguing that the provisions are too timid and do not go far enough. Such was its unpopularity, that the French Senate twice rejected the text, before ultimately passing the bill to the National Assembly for its final say, and subsequent adoption.

Welcoming the National Assembly's decision to back the Government's pension reform plans, French Prime Minister Jean-Marc Ayrault underscored the importance of this moment in politics. The real and profound reform will serve to save the French PAYG system, which was in danger, Prime Minister Ayrault stressed.

Highlighting the fact that the balanced reform was the fruit of social dialogue, the French Prime Minister explained that the provisions will ensure a fair distribution of the effort between employees, companies, and pensioners in France.

France's pension reform bill extends the pension contribution period in both the public and private sectors to 43 years by 2035. Furthermore, the legislation provides for a 0.3 percent rise over four years in employee and employer pension contributions. In addition, the bill provides for the creation of a hardship fund, designed to facilitate a reduction in the contribution period for those exposed to hardship factors. The legal age of retirement remains unchanged at 62.

Finally, the bill postpones for six months the date set for the annual revision of pensions, from April 1 to October 1.

TAGS: tax | pensions | European Commission | employees | retirement | legislation | tax rates | France | Europe

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