QUESTIONNAIRE: France - Social partners involvement in the reforms of pension systems

  • Observatory: EurWORK
  • Topic:
  • Agreements,
  • Collective bargaining,
  • Inequality,
  • Työmarkkinaosapuolten välinen vuoropuhelu,
  • Työolot ja kestävä työ,
  • Työmarkkinasuhteet,
  • Published on: 06 lokakuu 2013



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France
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Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

The public pension system is the main pillar of the pension system, and is completed by a compulsory private occupational system. Both are financed on a pay-as-you go basis.  Social partners have a reduced role in the management of the public pension system. However, their role is essential in the occupational schemes. Since 2008, three reforms were adopted, two affecting the public pension system (2008, 2010) and the other, the occupational schemes (2013). The government is preparing a new reform until 2014. Pension reform is one of the most controvertial issue of the French social dialogue as positiosn of actors are strongly opposed.

1. National pension policy context

1.1 During the recent years (since 2008) has pension reform been in the agenda of the government and/or social partners?

Please answer the multiple choice question below and provide additional details explaining your answer.

Government’s agenda:

  • Very high on the agenda

Social Partners’ agenda:

  • Very high on the agenda

1.2 Have all or some of the challenges mentioned below had an impact on the debate and/or on the development of pension reforms?

Please answer to the multiple choice question. Several challenges for the sustainability of the pensions systems are demographic ageing, ageing work force, low employment rates and tightening budgets (increased by the economic crisis). We would like to know how important these challenges are in your country for the pension reforms. If there is any other important challenge or cause for the pension reforms and it is not listed below you can develop briefly after the multiple choice questions.

Debate about pension reform

Challenges

Important impact

Some impact

No impact

Public Budget restrictions arising from the crisis    
Demographic ageing    
Ageing workforce    
Low employment rates
  • XX
   
Other (please specify below)      
Pension reform

Challenges

Important impact

Some impact

No impact

Public Budget restrictions / financial crisis    
Demographic ageing    
Ageing workforce    
Low employment rates    
Other (please specify below)      

1.3 Are job quality aspects considered in the framework of the sustainability and reforms of the pension system in your country?

Job quality is a relevant element for increasing participation in the labour market and therefore for the sustainability of the pension system. If relevant provide additional details.

  • ☐No
  • XYes

The issue of arduous working condition is linked to the Pension reform of 2003 (FR0309103F). It was decided, in the framework of this reform, to launch an intersectoral collective bargaining to define and to take into account arduous working condition. It was a central issue in the discussion on the reform of special pension schemes in autumn 2007 (FR0710019I) and social partners launched a negotiation of this topic in 2007 (FR0711029I). The aims were to improve working conditions as a preventive measure against workers being worn out by their occupations; and to compensate for the differences in life expectancy, particularly in the case of workers who combine several forms of arduous working conditions. But social partners failed to reach an agreement in 2008. The unions raised this issue again when they discussed on the pension reform of 2010, with the aim to obtain a lower age of retirement for employees that have start to work at 16 age old or below, or that were exposed to hardness at work as shift work.

Furthermore, social partners and policy makers have implemented a number of measures to retain older workers in employment over the last decade with the aim to improve their working condition and to maintain them in employment. The 2003 pension reform, which encourages older workers to continue with their employment in order to qualify for a higher pension by contributing for a longer period. The 2005 National Interprofessional Agreement (ANI) on the employment of older workers, followed by the 2006–2010 national plan which includes a number of measures intended to raise public awareness, retain older workers, ease the transition between work and retirement, simplify the transition from unemployment to the labour market among older people, and strengthen social dialogue over the issue of the employment of older workers. A law adopted in December 2008 contained an obligation of the social partners to conclude company agreements on the employment of older workers (FR0901029I). The Bill requires that companies, employing 50 or more people not covered by a sector or company level agreement on this issue, to conclude such an agreement at company level or to unilaterally establish a “plan of action” by 2010. In the event of non-compliance with the law, prior to 1st January 2010, companies could be fined an amount equivalent to 1% of their aggregate wage costs (FR0906029I) (see also a first appraisal of this measure: FR1007051I and the case study «the compulsory company bargaining on employment of older workers”). In 2009, the age that allows an employer to dismiss an employee on the ground his age (“mise à la retraite”, to force to retire) was raised from 65 to 70.

1.4 How are the three pillars of the pension system represented in your country?

Importance of the different pillars within the pension system

Pillars of the pension system

Main subsystem

Important

Exist but not very relevant

Does not exist

Public pension system      
Occupational system (company or sector level)      
Individual private pensions      
  • Public pension system

In 2011, the public pension system is composed of three main systems (régime):

- The public pension of the private sector (“régime général” managed by the Caisse nationale d’assurance vieillesse – CNAV) that covered 69% of the active population in 2011. According INSEE (2012), the number of insurers reached 18 millions in 2011 and the number of pensioners, 12.9 millions. The last report of "Direction de la recherche, des études, de l’évaluation et des statistiques" (DREES, “Les retraités et les retraites” 2013, s. 9) found 13.1 million of pensioners in December 2011. It provided 98 billions of allowance each year (CNAV, 2013). The average amount of the public pension is about 1000 euro per month.

There is also a social security system for the employees of the agriculture sector (“Mutalité sociale agricole”) that covers 2.5 million of pensioners.

- The public pension of the public sector that covers 16,5% of the active population. The main public sector pension regime is the central public administration (“Fonction publique de l’Etat”) that covers 2.3 million of pensioners (see “abrégé statistiques 2012”, Service des retraites de l’Etat, Ministère de l’Economie et des Finances, 2013).

- The public pension system for independent workers (“régime des non salariés”) that covers craft workers, farmers, retailers, accredited profession...) that covers 9.9% of active population.

The average amount of all public pensions allowance is 1256 euro per month in December 2011 (DREES 2003, s. 12).

  • Occupational system

The public pension system is topped up by compulsory supplementary pensions, which, like the basic pension, are financed on a pay-as-you go basis. For private-sector employees, there are two compulsory supplementary schemes: Association pour le régime de retraite complémentaire des salariés (ARRCO, covering all categories of employees and Association générale des institutions de retraite des cadres (AGIRC), covering only managerial and executive staff. In 2010, ARRCO covered 18 millions of employees and near to 11,5 millions of pensioners. AGIRC covered 4 millions of employees and 2,6 millions of pensioners. The average amount of pension of ARRCO is 3597 euro per year, and 9024 euro per year for AGIRC.

  • Individual private pension

According to DREES (2013), voluntary supplementary schemes including individual private pension represent only 2.3% of the total of pension allowance paid each year in France. However, French citizens used life insurance to provide a supplementary income or a capital when they retire. The total amount of outstanding of the life insurance in France was 1409 billion euro in the first quarter of 2013 (FFSSA 2013).

An updates overview on the French pension system in English is available on the Website of the Centre des Liaisons Européennes et Internationales de Sécurité Sociale (CLEISS).

2 The role of Social Partners in the pension system

2.3 What is the role of social partners in the pension system of your country (as a whole) and within the different pillars: public pensions, occupational pensions and private individual pensions or in other pension configurations? Has this role changed since 2008?

Please give a general and synthetic answer. This questions refers more to the formal aspect of the role of social partners than the actual involvement (to be developed in section 3)

Social partners have a reduced role in the management of the public pension system even if the executive committee of the public pension system of the private sector (Caisse national d’assurance vieillesse – CNAV) is based on parity principle (“paritarisme”, equal representation of employers and employees’ organisations) and contains 13 members representing employers and independent workers; 13 members representing employees and 4 qualified members nominated by the State. There are also members with a consultative voice that represent the State and the different ministries in charge of the CNAV. However, the social partners have no room on financial issues as the Parliament vote each year a law on the Financing of the Social Security (“Loi de financement de la sécurité sociales”) that fix the financial balance of the pension system (the level of expenses on the basis of forecasted incomes). The executive committee is consulted on the bill before it is adopted by Parliament and on all projects of legislation adopted by the government in the framework of the law adopted by Parliament. The relationships between the State and CNAV are included in a pluri-annual contract (convention pluri-annuelle d’objectifs) that fixed targets to CNAV. To summarise, social partners have mainly a consultative role even if they supervise the day-to-day management of the CNAV.

They also have a consultative role in the public sector scheme and in the non-employees schemes, with more autonomy to this last one.

Social partners are also involved in several permanent organisations as the “Conseil économique, social et environnemental” (Economic, social and environmental Committee) or the “Conseil d’orientation des retraites” (COR – “Pensions Advisory Council”), an independent body created in 2010 that offer a permanent monitoring of the French pension system. It reports to the Prime Minister but it is not a consultative body. The COR is not consulted by the government prior to any pension reform, but its work helps the government to prepare its reform. It brings together representatives of a broad range of organisations and government agencies. It has the following responsibilities:

  • monitor current changes in legally obligatory retirement schemes as well the medium and long term outlook for these schemes, with respect to economic, social and demographic trends ;
  • assess the requirements for ensuring the long-term financial viability of legally obligatory retirement schemes ;
  • analyse the financing of such schemes and monitor trends in their financing;
  • formulate opinions on future decisions ;
  • disseminate information on the retirement system and on the effects of reforms undertaken in order to guarantee its financing ;
  • monitor respect for the principles that underlie the retirement system and monitor the living standards of retirees relative to the working population, as well as other indicators of trends in retirement schemes, including replacement rates.

With the monitoring data, the Council drafts a report to the Prime Minister at least every two years. The last was published on the 22 January and proposed an assessment of the French pensions system (Douzième rapport du Conseil d’orientation des retraites, « Retraite : un état des lieux du système français ») These reports are distributed to the Parliament and made available to the public.

Social partners also participate to ad-hoc structure to discuss about pension reform as the new commission for the future of pension (Commission pour l’avenir des retraites) created on the 27th February 2013 by the government.

However, their role is essential in the occupational schemes – Association générale des institutions de retraite des cadres (AGIRC) and Association pour le régime de retraite complémentaire des salariés (ARRCO) – as they have a large autonomy even if they are forced to adapt these schemes to Pension reforms launched by the State. The two compulsory occupational schemes where created by a National collective agreement in 1947 (AGIRC) and 1961 (ARRCO). Social partners are the only responsible of the management of both schemes. The social partners negotiate on a periodic basis on the financial framework of the schemes to insure their balance and set the level of social contribution. They have signed about 12 agreements since 2000.

Finally employees’ representatives play a role, through information and consultative bodies, in some private pension systems within company-level schemes such as employee savings plans and profit-sharing schemes

Since 2008, there is no significant change in their role in the different pillars.

2.4 Please complete the table below to indicate who has prime responsibility for planning and design of public pensions and occupational pensions, and who is responsible for implementation, highlighting the respective role of different stakeholders.

This question is related to 2.1 and has a comparative analysis purpose. For that reason if you think that you should give further explanations to the answers given in the following table, please develop in 2.1

Outline of main responsibilities in pension systems (public and occupational schemes)
 

Public pensions

Occupational schemes

Main responsibility for design – set the framework or legislate -

X Government (national)

☐Social partners

☐Private sector institution (please specify)

☐Other body (please specify name and make up)

☐ Government (national)

☐Government (regional)

X Social partners

☐Private sector institution (please specify)

☐Other body (please specify name and make up)

Main responsibility for implementation

X Government (national)

☐Government (regional)

X Social partners (through the CNAV)

☐Private sector institution (please specify)

☐Other body (please specify name and make up)

☐Government (national)

☐Government (regional)

X Social partners

☐Private sector institution (please specify)

☐ Other body (please specify name and make up): employers.

Stakeholders consulted on a regular basis or when important aspects are discussed

X Employers’ organisations (cross-sectoral)

☐Employers’ organisations (sectoral)

XTrade unions (cross-sectoral)

X Pension institutions (i.e quasi-public bodies)

☐NGOs

XOther bodies represented in the Conseil d'orientation des retraites (COR – "Pensions Advisory Council") : representatives of families and the elderly, the directors of the government authorities most directly concerned with retirement policy, together with experts chosen for their experience and competence.

X Employers’ organisations (cross-sectoral)

☐Employers’ organisations (sectoral)

X Trade unions (cross-sectoral)

☐ Pension institutions (i.e. quasi-public bodies)

☐NGOs

☐Other bodies (please specify name and make up

Outline of main responsibilities in pension systems (public and occupational schemes)
Level of influence of social partners

X There is a legal obligation to consult social partners for any reform

☐Social partners are consulted and have a right of veto (formal)

X Social partners are consulted but do not a right of veto (formal)

X There is a legal obligation to consult social partners for any reform

☐Social partners are consulted and have a right of veto (formal)

X Social partners are consulted but do not a right of veto (formal)

Forum for and level of dialogue

X Consultation takes place in ad-hoc tripartite groups (conférence sociale, Commission pour l’avenir des retraites)

X Consultation takes place in permanent tripartite structures (Conseil d'orientation des retraites – COR – “Pensions Advisory Council”)

X Other forum for consultation (Conseil économique, social et environnemental)

X Dialogue takes place at the national intersectoral level

Dialogue takes place at the national sectoral level

☐Dialogue takes place at another level (please specify)

☐Consultation takes place in ad-hoc tripartite groups

☐ Consultation takes place in permanent tripartite structures

☐Other forum for consultation (please specify)

X Dialogue takes place at the national intersectoral level

☐Dialogue takes place at the national sectoral level

☐Dialogue takes place at another level (please specify)

  • In case there is a statutory funded (capitalisation) occupational scheme in your country, please provide more details on the main responsibility for design and implementation, stakeholders consulted, level of influence of social partners and forum and level of dialogue
  • In case there is a mandatory private individual schemes in your country, please provide more details on the main responsibility for design and implementation.
  • In case there is a configuration of the pension sub-system different from public, occupational, statutory funded occupational, private and mandatory private, please provide more details on the main responsibility for design and implementation.

3 Involvement of social partners in pension reforms

This section focuses on the role of social partners in the pension systems reforms in your country in recent years, although some information on previous reforms could be mentioned if relevant and if no reforms were adopted very recently. On the other hand, if many reforms have been taken in recent years, please focus on the most important ones and the ones that have been elaborated with the involvement of social partners.

3.1. Since 2008 has there been relevant pension reform/s in your country?

Please answer to the multiple choice question and summarise the main characteristics of the reform/s.

  • ☐No
  • X Yes

The first Pension reform was launched in 1993 (Réforme Balladur) followed ten years later by a second reform in 2003 (Réforme Fillon) and, in 2007, the reform of the public special schemes. Since 2008, three new reforms were adopted, two affecting the public pension system, in 2008 and in 2010, and the other, the compulsory occupational schemes, in 2013. Furthermore, the government have installed a “commisson on the future of the pension”, in February 2013, to prepare a new reform until 2014.

  • Reform of 2008: In March, the government launched a scheduled process of discussions with the social partners about pension reform (FR0703029I). The main purpose of the reform is to increase the number of contribution years required for a full retirement pension (currently 40 years) by three months a year beginning in 2009, in order to reach 41 years in 2012 (FR0807019I). The reform is considering as a continuation of the principles fixed in the past reform of 2003.
  • Reform of 2010: On 13 July 2010, the Council of Ministers introduced a large reform with a bill that increases the legal age of retirement from 60 to 62 years between 2011 and 2018, at a rate of four months per year. The duration of individual contributions for citizens receiving a full pension on retirement was set at 40 years in 2008 and will rise to 41 years in 2010 and to 41.5 years by 2020. The reform increases the pension contributions of civil servants (FR1007021I). The legislation proposing an increase in the age at which the State pension is payable was finally adopted by the French parliament on 27 October 2010. The new law (Law 2010-1330 of 9 November 2010) contains two main measures affecting workers: an increase in the age at which individuals can retire (from 60 to 62 years); an increase from 65 to 67 in the age at which individuals will be entitled to the full state pension (FR1012011I).
  • Reform of 2013: On the 13 March 2013, the social partners managing the compulsory occupation schemes have concluded a National interprofessional collective agreement on complementary pension (“Accord national interprofessionnel du 13 mars 2013 sur les retraites complémentaires”). The signatories are the three representative employers’ organisations (Medef, UPA, CGPME) and three of the five representative unions (CFDT, CFTC, FO). The agreement sets an increase in the contribution rate over two years (+ 0,10 point of percentage) and smaller pension increases until 2016. The aim is to reduce deficits of the pension schemes for the coming years, but not to implement of structural reforms. Working groups should be set up for this purpose in the coming months.

3.2 In general, what are the main elements that have been addressed in the recent reforms of the pension system in your country?

Please answer the multiple choice question and provide additional details explaining your answers. This question refers mainly to the public pension system. If there are relevant developments (reforms) beyond the public pension system, please explain after the multiple choice question.

  • Changes to pillar structure of the overall pension framework and/or development of complementary retirement savings ☐Yes

Change in the statutory retirement age (eligibility): XYes

The reform of 2010 is the first one to increase the statutory retirement age. It increases progressively from 60 to 62 between 2011 and 2018, at a rate of four months per year. Currently the government has announced a new pension reform by 2013 that could forecast a new increase. But this could only be supported by employers’ organisations and would meet a strong opposition of unions and link political parties.

Restrict access to early retirement (eligibility): XYes

In the last decade, public authorities tried to discourage such pre-retirement and early retirement. However, in the name of fairness the last reforms concerning pension makes early retirement possible for workers suffering from invalidity related to arduous work or for workers who began work before 20 years if they contributed for a full period of insurance (Decree of 2nd July 2012).

Otherwise, the reform of 2003 introduced a reduction of the amount of the pension for individuals which have not reached the number of required contribution period. Instead of receiving 50% of the annual salary average (“taux plein”), individual lose 1,25% of the full pension amount for each lack of quarter. An employee that want to retire with a contribution period of 152 quarter against 162 quarter (for a full pension) will receive 43,75% of the annual salary average.

Equalise statutory retirement age between men and women (eligibility): XYes

Equal treatment between men and women is fully achieved. However the reform rebuilt the mechanism that allow two years right of pension per child to the mother in the way to cover also the father

Linkage between pension age and life expectancy gains: XYes

The reform of 2010 increased the number of contribution years required for a full retirement pension (see below) and set a mechanism to increase this period in case of increase of life expectancy.

Increase of number of contribution years required (eligibility): X Yes

The reform of 2010 was to increase the number of contribution years required for a full retirement pension (currently 40 years) by three months a year beginning in 2009, in order to reach 41 years in 2012. Currently the government has announced a new pension reform by 2013 that could increase the number of contribution years required.

  • Linkage between benefit levels and financial balance of the pension scheme: ☐Yes

Promotion of higher pension by working longer (adequacy): XYes

The main reform of 2010 promote higher pension by working longer introducing an incentive to work longer (“surcote”). Individual that pursues work after the statutory retirement age and that have reach the required contribution period to obtain a full pension, receives an increase of 5% of its pension for each supplementary working year. It will also obtain an increase of the occupational pension (AGIRC - ARRCO).

  • Change in the indexation system: ☐Yes
  • Changes in the groups of workers covered (coverage): ☐Yes

Others XYes

The reform of 2010 also increased progressively the level of the minimum pension (“minimum vieillesse”) served to older individual that didn’t obtain a right on public pension. The minimum pension were raised to 676,81 euro (+6,9%) in 2009 and was progressively increase about 25% by 2012 in comparison to its amount of 2007.

The two reforms of the public pension system (2003 and 2008) maintained the pillar structure of the overall pension framework and the indexation system even if, for the first time, the reform of occupational pension of 2013 have introduced a limited increase of pension. Also the group of workers covered is still the same due to previous enlargements. To reform the pension system, the governments avoided two unpopular measures as reducing or freezing pension or to increase the contribution rate. They used the same tools as the increase of contribution years required to obtain a full pension and to restrict access to early retirement.

3.3 Overall, according to the various sources of information (journals, articles, scientific publications, social partners reports, government reports), how important has been the involvement and role of social partners in the recent pension system reform/s?

Note the question is about the pension system as a whole

Please select one option and explain your answer below for further clarification:

  • ☐ Overall, the involvement of social partners has been very important and their role essential
  • X Overall, social partners are involved to some extent and they have influenced the reform/s
  • ☐ Overall, social partners have had little or no involvement and their role is not important or none

The involvement of social partners is limited to a role of consultation, as the general framework of public pension reforms is the task of the government. However, social partners try to influence the legislator but their positions are different as the main proposed changes (raising of retirement age or of years of contribution have « generally been unopposed by employer representatives, but strongly challenged by trade unions » (Industrial Relation 2012, European Commission, 2013, s. 248).

Employers’ organisations promote an increase of the statutory retirement age, an increase of contribution years required to obtain a full pension and refuse any increase of social contribution to preserve the competitiveness of the French economy. On the other side, unions are opposed to these different unpopular tools. To express their view, they have organised huge demonstrations (FR1012011I). However, their influence is limited in particularly for the last reform of 2010 where the government decided to reform without trying to reach a consensus between social partners or to obtain an agreement of few unions. Even though unions are strongly against changes in the pension system, some of the unions’ internal expert adopt a more flexible position and agree with some gradual changes. In spite of strong union opposition, they could not assert any of their claims during the policy-making process of the 2010 reform... The only gain happened after the election of François Hollande, in 2012, that decided to enlarge the possibilities to early retirement for individuals that have a long career (when they obtain the number of quarter of contribution to obtain a full pension but before the age of statutory retirement). This device, obtained by CFDT in the framework of the reform of 2003, was limited by the reform of 2010. As it was an electoral promise of François Hollande, the government adopted a decree to enlarge the potential beneficiaries of the measure that can be considering as a gift to unions that supported him for the election.

Of course, about the reform of compulsory occupational schemes, social partners are fully involved as they manage the schemes with a high autonomy.

  • Le Monde, “la réforme des retraites entre dans le vif du sujet”, 13 July 2010.
  • “Le survol de 2008 : Une année de réformes et de crise majeure”, Liaisons Sociales Quotidien n° 278 du 31/12/2008
  • “Le survol de 2010 : L’année de la réforme des retraites et de l’austérité”, Liaisons Sociales Quotidien: N° 3 du 05/01/2011
  • EIRO “Pensions body calls for further pension reforms” (FR0703029I), 30 July 2007, Eurofound (2007)
  • EIRO “Government forges ahead with pensions reform plans » (FR0807019I), 20 August 2008, Eurofound (2008)
  • EIRO “Unions oppose government bill on pension reform”  (FR1007021I), 19 October 2010, Eurofound (2010)
  • EIRO “Reform of state pension system despite strong opposition” (FR1012011I), 11 February 2011, Eurofound (2011)

3.4 More in detail, what has been the involvement of the social partners in the recent pension system reforms? For each of the most relevant pension reforms (max. three) adopted since 2008 (or currently being discussed) develop on the following aspects:

Explain answer if necessary.

Reform “Fillon” of 2008

  • Law n° 2008-1330 of the 17 December 2008 on the Financing of the Social Security for 2009 (Loi de financement de la sécurité sociale pour 2009)
  • Scope: whole public pension system
  • The main purpose of the reform is to increase the number of contribution years required for a full retirement pension (currently 40 years) by three months a year beginning in 2009, in order to reach 41 years in 2012 (FR0807019I). The reform is considering as a continuation of the principles fixed in the past reform of 2003. It also restricted access to early retirement and allowed employees to work until 70 (employers are forbidden to force employee to leave on retirement before the age of 70).

Role of social partners

  • Please answer the multiple choice question and explain your answer bellow:
  • ☐ Reforms adopted upon proposal from social partners (previous agreement between employers and trade unions)
  • ☐ Reform elaborated through tripartite cooperation/dialogue where most of the content was agreed with social partners
  • ☐ Reform elaborated through tripartite cooperation/dialogue where part of the content was agreed with social partners
  • X Reform adopted by the government despite views expressed by social partners
  • ☐ Reform has been collectively agreed between the social partners through Social Dialogue
  • ☐ Other…….(please elaborate)

In March 2008, the government launched a scheduled process of discussions with the social partners about pension reform (FR0703029I), known as Rendez-vous 2008. The 2003 Fillon pension reform provided for adjustments to the pensions system every four years based on changing demographic, economic and social conditions. The process started on 27 March with a series of bilateral discussions between the Minister of Labour, Social Relations, Family and Solidarity, Xavier Bertrand, five trade union confederations and three employer organisations. During a plenary session of talks, on 28 April, Mr Bertrand presented a working document on the government’s proposal that announced the increase of the statutory retirement age from 60 to 61. The employers’s organisations are satisfied but all unions decided to organise a national demonstration on 22 May. From 300,000 to 700,000 people (according to police or union sources) demonstrated against the raise or contributing period to 41 years and the increase of the statutory retirement age. Then, on 26 June, the Minister of Economy, Industry and Employment, Christine Lagarde, Minister Bertrand and the Secretary of State for Employment, Laurent Wauquiez, met with representatives of the five trade union confederations and three employer organisations in order to present a set of main measures (in French, 285 Kb PDF) on older people’s employment that the government had decided after consultations on the issue. Despite the opposition of unions, the Parliament adopted the law of the financing of the social security on 27 November.

Reform of 2010

  • Law n°2010-1330 of the 9 November 2010 on Pension reform.
  • Scope: the whole public pension system
  • What was the main purpose of the reform: to increase the legal age of retirement from 60 to 62 years between 2011 and 2018, at a rate of four months per year. The duration of individual contributions for citizens receiving a full pension on retirement was set at 40 years in 2008 and will rise to 41 years in 2010 and to 41.5 years by 2020. The reform increases the pension contributions of civil servants. It increases from 65 to 67 in the age at which individuals will be entitled to the full state pension (FR1012011I).

Role of social partners

  • Please answer the multiple choice question and explain your answer bellow:
  • ☐ Reforms adopted upon proposal from social partners (previous agreement between employers and trade unions)
  • ☐ Reform elaborated through tripartite cooperation/dialogue where most of the content was agreed with social partners
  • ☐ Reform elaborated through tripartite cooperation/dialogue where part of the content was agreed with social partners
  • X Reform adopted by the government despite views expressed by social partners
  • ☐ Reform has been collectively agreed between the social partners through Social Dialogue
  • ☐ Other…….(please elaborate)
  • Please elaborate on the process of elaboration of the reform and the role of the social partners at different stages and in relation to different aspects at stake, providing details of the process and level of consultation (intersectoral/sectoral) and if there is any specificity in relation to the established model of industrial relations in your country. In case the involvement of social partners was minimal, please explain why.

On 12 January 2010, the Ministry of Labour announced to the Senate that there is no other solution to work longer to save the public pension system. On 25 January, President Sarkozy stressed that the pension reform will apply to public and private sector that the only measure he wants to avoid in a decrease of the pension level. On 15 February, the government organised a social forum to discuss on reforms with the social partners. It has to be noticed that all previous steps were decided without consulting (formally) social partners.

Discussions with social partners began within the COR on March with strong debate between employers’ organisations and unions on the forecasts presented. Employers asked for new forecast including a 45 years and an increase of the retirement age from 60 to 65. The official process of consultations started on 27 March with a series of bilateral discussions between the Minister of Labour, Eric Woerth, five trade union confederations and three employer organisations. On 10 May, the government launched a “social summit” and President Sarkozy declared that the reform will avoid social contribution increase and will increase the statutory retirement age. On 27 May, bilateral discussion went further with the ministry of Labour. On 18 June, he presented the draft of the pension reform with an increase of retirement age to 62 by 2018. On 24, between 800,000 and 2 million people demonstrated against the pension reform. On the 7 July, all unions adopted a common position against the increase of retirement age. On 13 July 2010, the Council of Ministers introduced a large reform with a bill that increases the legal age of retirement from 60 to 62 years between 2011 and 2018, at a rate of four months per year. The duration of individual contributions for citizens receiving a full pension on retirement was set at 40 years in 2008 and will rise to 41 years in 2010 and to 41.5 years by 2020. The reform increases the pension contributions of civil servants (FR1007021I). The legislation proposing an increase in the age at which the State pension is payable was finally adopted by the French parliament on 27 October 2010. The new law (in French, 700Kb PDF) (Law 2010-1330 of 9 November 2010) contains two main measures affecting workers: an increase in the age at which individuals can retire (from 60 to 62 years); an increase from 65 to 67 in the age at which individuals will be entitled to the full state pension (FR1012011I).

Reform on compulsory occupational pension

Role of social partners

  • Please answer the multiple choice question and explain your answer bellow:
  • ☐ Reforms adopted upon proposal from social partners (previous agreement between employers and trade unions)
  • ☐ Reform elaborated through tripartite cooperation/dialogue where most of the content was agreed with social partners
  • ☐ Reform elaborated through tripartite cooperation/dialogue where part of the content was agreed with social partners
  • ☐ Reform adopted by the government despite views expressed by social partners
  • X Reform has been collectively agreed between the social partners through Social Dialogue
  • ☐ Other…….(please elaborate)
  • Please elaborate on the process of elaboration of the reform and the role of the social partners at different stages and in relation to different aspects at stake, providing details of the process and level of consultation (intersectoral/sectoral) and if there are any specificities in relation to the established model of industrial relations in your country. In case the involvement of social partners was minimal, please explain why.

The negotiation started on 22 November 2012, between the three representative employers’ organisations and the five national representative unions. Employers’ organisation presented conservatory measures to insure the financial sustainability of occupation schemes. After several round of negotiation, an agreement was reached on the 13 March. Three unions signed the agreement: the French Democratic Confederation of Labour (Confédération française démocratique du travail – CFDT), the French Christian Workers’ Confederation (Confédération française des travailleurs chrétiens – CFTC) and the General Confederation of Labour – Force ouvrière (FO). The General Confederation of Labour (Confédération générale du travail – CGT) refused as the agreement has a negative impact of purchasing power to pensioners. The Confederation of Professional and Managerial Staff – General Confederation of Professional and Managerial Staff (Confédération Générale de l’Encadrement – Confédération générale des cadre – CFE-CGC) denounced that manager will more contribute than the other categories of employees. If the government didn’t participate to the negotiations, it was very aware on the results as the solution agreed on indexation could help him to prepare the future public pension reform of 2013-2014.

3.5 As a result of the involvement of social partners in the reforms included in question 3.4, what have been the main outcomes and achievements within the scope of those reforms.

As mentioned before, employers’ organisations are favourable to the pension reform introduced by the governments. Therefore their involvement consist more to support the reform and to convince government and Parliament to adopt in-depth changes. About the unions, they are traditionally opposed to pension reform. As said former Prime Minister Michel Rocard in 1991, “"With the pension reform, it is enough to blow several governments”. The first results of involvement of unions are to obstruct any reform and to delay them, particularly to avoid an increase of the statutory retirement age. On this issue, union achieve to rally their members and the citizens with demonstrations. However, internal experts of unions that are aware on the financial situation of the pension system have a more “open mind” when they discuss on this issue and, some unions as CFDT or CFTC have done about the reform of 2003, may support some changes. Furthermore unions, except CFDT, refuse any structural change based on an in-depth reform of the pension system.

However, as highlights the pension reform of 2010, this opposition has a little influence of the content of the reform. In 2010, the legislation followed a period of formal consultations with the social partners, but trade unions organised a series of industrial actions and demonstration in the summer of 2010. In response, as stresses the Industrial Report 2012, “the government made some adjustments to changes for workers with long careers or performing arduous work, although the increase in the overall pension age went ahead: the retirement age is increased by four months per year from 1 July 2011, reaching 62 in 2018”.

On the side of unions, the most controversial issues is the increase of the statutory retirement age, and an increase of the increase of number of contribution years required, as the statutory retirement age of 60 years old is considered as a major social conquest. On employers’ organisation point of view, the main combat is to block any increase of social contribution to maintain the competitiveness of companies. Point of view of unions and employers’ organisation can reach some consensus to limit the increase of pension allowance as they decided it for the compulsory occupational pension reform of 2013.

3.6 Please explain if the involvement of social partners in recent pension reforms has changed in comparison with previous periods (before 2008, for example). If this is the case, please explain. Why their involvement has changed? What have been the consequences of the change for the reform and its outcomes?

The involvement of social partners in recent public pension system reforms is similar in comparison with previous periods. However, the opposition of unions was stronger in 2010 with an open conflict between unions and the President Sarkozy. Union build a common front against the reform and organise a series of successful demonstration in term of number of participants (FR). A position that can be explained by the fact that the two main issues of the reform were unacceptable for union: increase of statutory retirement age and increase of period of contribution years. Despite the announcement to have a social dialogue on the pension reform (Le Monde, “Retraite: Sarkozy promet de ne pas passer en force”, 16 February 2010) the government refused to change its plan as it never believe an agreement was possible with the unions, as explain Raymond Soubie, former adviser on industrial relation of President Sarkorzy (Le Monde, “L’Elysée va devoir recoller les morceaux d’un dialogue social brisé par le conflit”, 27 October 2010). The reform was adopted without a real social dialogue.

4 Social partners’ positions on pension reforms

4.1 What are the views of trade unions and employers’ representatives on different elements of pension reforms?

4.1.1 In general, what are the views on the whole on recent reforms of the pension system? What do they think about the changes that have taken place? In their opinion, what are the elements that should have been changed and have not changed yet?

Employers’ organisation were satisfied as the reforms increased the statutory retirement age (or the contribution years) without increasing social contributions. They also agree that the reform didn’t reduce pension level even if their recent position in the negotiation of the compulsory occupational reform shows that they are in favour of a freeze of the amount of pension or a moderate increase lower than inflation rate. Employers are also in favour on a structural reform.

The need of a large structural reform is a position shared with CFDT that is in favour on a rebuild of the system with a pension system based on points as the Swedish model (Jean-Louis Malys, “La position de la CFDT sur les retraites Pour une réforme systémique”, Cadres-Cfdt, n°453. avril 2013). But other unions are mainly opposed to such a reform.

Other unions mainly denounced the reforms and plead to maintain the existing system asking for extending the financing of the pension system to other incomes instead of the current system based on social contribution shared between employers and employees.

4.1.2 On the public (state) pensions, what are the views of social partners on the reform of the following aspects and why?

  • Views on public budge sustainability, changes to statutory pension age and contributions record
  • Views on eligibility (closing pathways to early exit)
  • Views on coverage of the various groups of workers
  • Adequacy income for living standards ( including views on replacement rates, views on role of minimum guarantee pensions vs. earning-related pensions)
  • Views on changes to incentives to continue working
  • Views on changes to indexation
  • Other main aspects of social partner positions

About sustainability, unions mainly avoid the issue forecasting an increase of the economy and of the active labour force. Budget sustainability is rather a concern for employers’ organisation that highlights the too positive forecasts of the Conseil d’orientation des retraites or of the governments.

The closing pathways to early exit is a dilemma for social partners. They all agree that on a macroeconomic point of view, this tool have to be avoided. However, in case of restructuring, both side agreed on incentives for voluntary departures in retirement and early retirement (some large companies have supported their own early retirement schemes) or part-time work for older workers. These tools reach a consensus within companies and are largely approved by employees.

The question of coverage of various groups of workers is not relevant in France, as the public pension system covers all employees from the first working hour. However there is still a difference between the public pension schemes of employees of the private sectors and the pension scheme of the civil servants in favour of the last. But unions are in a difficult position on this issue as the union density is much higher in the public sector than in the private sector. On the topic of adequacy income for living standards, social partners mainly estimate thas it is the task of the government to establish the minimum standards, even they are not against to increase the minimum pension level as it was decided in the framework of the reform of 2010. Social partners have concerns about incentives to continue working mainly in a context of increase unemployment. About indexation, social partners opinion differs, as unions wants to avoid freeze of pension or lower increase (less than inflation rate) and employers are more favourable, as they recently explain during the negotiation on complusory occupational schemes. One of the main consensus between social partners is to take into acount the life expectancy.

4.1.3 On the occupational schemes, what are the views of social partners on the reform of the following aspects and why?

  • Views on changes to the overall pension framework and the role of occupational schemes in comparison with public pension schemes.
  • Views on funded statutory old-age pension schemes (when relevant)
  • capitablisation:
  • Views on shift from defined benefits to defined contributions
  • Other main aspects of social partner positions

The CGT has denounced the reform of 2013 on the occupational schemes AGIRC-ARRCO (see Press realease, in French) as it will reduce the increase of pension that would have negative impact on purchasing power for the current and future retires. CGT was in favour of an increase of social contribution mainly those paid by employers. Three unions – CFTC, CFE-CGC and FO – proposed to reduce the increase of pension below the increase of inflation rate. CFDT was in favour of a global reform. Employers’ organisations (Medef, UPA, CGPME) agreed a small increase of social contributions if unions agreed on a reduce increase of pension below inflation for five years. Medef started the negotiation claiming a freeze of pension for three years. Finally the agreement allows to smooth the financial situation for only few years tacking into account the reform will strongly reduce Agirc-Arrco reserves. As the government has announced the public pension reform by 2013, under the pressure of the European Commission, social partners managing the occupational pension prefer to wait the adoption of this furure reform before to negotiate any in-depht changes in their scheme.

The last negotiation also shows that unions are not agree amongst themselves and are not ready to assume sufficient measures to insure the financial sustainabilty of the occupational scheme.

4.1.4 On the private schemes, what are the views of social partners on the reform of the following aspects and why?

Not relevant for France as the role of private schemes is marginal. However, social partners, in particularly unions, opposed to increase the role of private schemes as their priority is to reinforce the two first pilliards of the pension system.

4.1.5 According to the opinion of the social partners which of these objectives has been or will be achieved through the pension reforms?

  • Better financial and public budget sustainability: social partners agreed that pension reforms will have a positive impact of financing of the pensions system, even employers wish more efforts and unions that demanded efforts on employees and pensioners are too severe.
  • Extension of coverage to groups of workers: not relevant as the French public pension system covers all the workforce.
  • Achievement of adequate income and living standards: employers want to go further (reducing increase of pension) but union are mainly opposed even they agree on a temporary basis to reduce the increase of occupational pension.
  • Reduction of dependency ratios in the labour market: social partners wish the reduction of dependency ratios but failed to negotiate on tools that may raise the ratio.
  • More social protection for older workers at work and/or receiving pensions: not relevant, older workers received the same social protection. Union are traditionnaly against accumulatuon of salary work and pension.
  • Active ageing through combination of partial work and partial retirement: not relevant, these issues are not cover by the pension reform.

4.2 Please explain, if relevant, whether views diverge among trade unions and among employers’ representatives and if views have changed over time.

With regard to the changes of views over time, the reference period should be after 2000, with especial attention to what has happened after 2008.

No significant changes over time. The employers’ organisations want to insure the financing of the public pension scheme without any increase of social contribution and only by an increase of the statutory retirement age from 62 to 65 years old.

4.3 What are the most consensual issues and least consensual issues for social partners concerning pension reforms?

With regard to the changes over time, the reference period should be after 2000, with especial attention to what has happened after 2008.

Social partners agreed to maintain the pay-as-you go pension system and to extend the working life but they have not the same views on how to extend it. Employers are in favour of an increase of the number of contribution years required for a full retirement pension from currently 41,5 years for people born in 1955-1956, to 43. Unions as CFDT could agreed an increase if the reform take into account arduous work and allows workers that start working earlier (at 16 years) or have worked on arduous positions, to leave earlier. Other unions are mainly against any increase. There are no other consensual issues as their points of view are systematically different.

4.4 Please explain if topics such as labour market policies for older workers and working conditions are highlighted by social partners as an important factor in their views on pension reforms.

Social partners were involved in the compulsory negotiation on older workers on company and sectoral level that was introduced in 2008 (FR1007051I) and now in the negotation of the “generation contract” (FR1209031I) with the aim to maintain older worker in employment and to facilitate hiring of young workers.

5. Commentary

After each concluded pension reforms, government announced to have saved the public pension system for the next ten or twenty years. However, after the important reform of 2010, the new governement announced to launch a new reform in 2013. It had estabished a “commission on the future of the pension” on 27 April that have to prepare some scenario by June to prepare a concertation with social partners, that will start after a social forum scheduled in June (“conférence sociale”). Pension reform is one of the most controvertial issue of the French social dialogue as position of employers organisation and governement of one side, and unions, of the other, are strongly opposed. Excepting the reform of 1993 that was adopted during August by decree preventing any reaction of unions, all last reforms of the public pension system put hundred of thousand people in the streets to demonstrate again the proposed reform whatever how the government proceed. In 2003, the governement hold a strong concertation and obtained an agreement of the CFDT. But unions as CGT or FO where strongly opposed. In 2010, the government didn’t try to obtain any agreement from social partners, and demonstrations didn’t changed the main measures of the proposed reform. To conclude, if social partners agreed on the maintain of a pay-as-you-go pension system, there point of view differ of almost all other issues. They are unable to agreed on a refund and modernisation of the pension system leaving governments to take unpopular decisions.

6. Sources

  • DREES, « Les retraités et les retraites - édition 2013 », Collection Études et statistiques, 2013, Ouvrage sous la direction de Laurent Lequien - coordonné par Virginie Andrieux. ISBN : 978-2-11-129997-9 - ISSN : 1295-6570
  • ADECRI (Agency for the development and coordination of international relations), “The French social protection system”, 2008
  • CLEISS (Centre des Liaisons Europeennes et Internationales de Sécurite Sociale)“The French Social Security System”, 2013
  • Le Monde, “la réforme des retraites entre dans le vif du sujet”, 13 July 2010.
  • “Le survol de 2008 : Une année de réformes et de crise majeure”, Liaisons Sociales Quotidien n° 278 du 31/12/2008
  • “Le survol de 2010 : L’année de la réforme des retraites et de l’austérité”, Liaisons Sociales Quotidien: N° 3 du 05/01/2011
  • EIRO “Pensions body calls for further pension reforms” (FR0703029I), 30 July 2007, Eurofound (2007)
  • EIRO “Government forges ahead with pensions reform plans » (FR0807019I), 20 August 2008, Eurofound (2008)
  • EIRO “Unions oppose government bill on pension reform”  (FR1007021I), 19 October 2010, Eurofound (2010)
  • EIRO “Reform of state pension system despite strong opposition” (FR1012011I), 11 February 2011, Eurofound (2011)
  • Interview with Arnaud D’Yvoire (Observatoire des retraites), April 2013
  • Jean-Louis Malys, “La position de la CFDT sur les retraites Pour une réforme systémique”, Cadres-CFDT, n° 453, avril 2013.

Frédéric TURLAN, IR Share

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