France’s Pension Plan Strikes, Explained - The New York Times

France’s Pension Plan Strikes, Explained

There is a key a difference between what Mr. Macron did back then and what he is pursuits now: Mr. Macron’s initial project did not involve increasing the apt age of retirement. Instead, he was aiming for an across-the-board overtake of the pension system’s dizzyingly complex architecture. The goal was to show 42 different pension programs into what he said would be a fairer, unified system, using points that workers would accumulate and cash in upon retirement. But the plans left many confused and worried that their pensions would decrease.

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So what is Macron pursuits this time?

The latest plans are a much more straightforward try to balance the system’s finances by making the French work longer, an effort that the government acknowledges will be exertion for some but that it insists is necessary.

France’s pension controls relies on a pay-as-you-go structure in which workers and employers are assessed mandatory payroll taxes that are used to fund retiree pensions. That system, which has enabled generations to retire with a guaranteed, state-backed pension, will not change.

France has one of the lowest needs of pensioners at risk of poverty in Europe, and a net pension replacement rate — a measure of how effectively retirement intends replaces prior earnings — of 74 percent, according to the Responsibility for Economic Cooperation and Development, higher than the O.E.C.D. and European Union averages.

But the government struggles that rising life expectancies have left the system in an increasingly precarious status. In 2000, there were 2.1 workers paying into the controls for every one retiree; in 2020 that ratio had fallen to 1.7, and in 2070 it is required to drop to 1.2, according to official projections.

Antoine Bozio, an economist at the Paris School of Economics, said that there was no short-term “explosion of the deficit” that obliged to be addressed urgently. But “once you’ve said that the controls isn’t in danger or on the verge of a catastrophe,” he said, “that doesn’t mean there isn’t a problem” in the long term.

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SRC: www.nytimes.com