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The pension system in The pension system in FranceFrance

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History History

The first pension systemsThe first pension systems:: 1673 the sailors1673 the sailors 1831 the soldiers1831 the soldiers 1894 the miners1894 the miners 1909 the railway workers1909 the railway workers 1928 farmers’ pension law1928 farmers’ pension law ……..

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1945: setting-up of a 1945: setting-up of a “general scheme” based on “general scheme” based on the values of solidarity and the values of solidarity and mutual aidmutual aid This was not really a unified system This was not really a unified system

because there was strong hostility because there was strong hostility particularly among the liberal professions particularly among the liberal professions and farmersand farmers

Maintenance of the old special schemes Maintenance of the old special schemes (miners, railway workers, etc.)(miners, railway workers, etc.)

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1945: one Social Security 1945: one Social Security blockblock

3 mechanisms3 mechanisms: : Health insuranceHealth insurance State pensionState pension FamilyFamily

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State pension based on State pension based on the contributory principlethe contributory principle

The contributory choice was made during The contributory choice was made during this post-war period in which the values this post-war period in which the values of solidarity among generations, of solidarity among generations, individuals and occupations were individuals and occupations were particularly strongparticularly strong

Furthermore, funds managed by Furthermore, funds managed by capitalisation (funded pension plans) capitalisation (funded pension plans) before the war went bankrupt before the war went bankrupt

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Joint managementJoint management

The CNAV: joint management by The CNAV: joint management by between employers and employees between employers and employees

CompulsoryCompulsory supplementary systems: supplementary systems: AGIRC for managers, ARRCO for AGIRC for managers, ARRCO for employees and workers employees and workers

Full pension = Basic pension + Full pension = Basic pension + ARRCO or AGIRCARRCO or AGIRC

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In the 90s, reforms which In the 90s, reforms which led to a reduction in led to a reduction in retirement pension amountsretirement pension amounts

Question of the age pyramid and Question of the age pyramid and unemployment levelunemployment level

Liberal policies merely sort out the Liberal policies merely sort out the problem on an ad hoc basis but do not problem on an ad hoc basis but do not propose solutions propose solutions

Supplementary schemes met the same Supplementary schemes met the same fate….fate….

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An example of the An example of the consequences for an consequences for an employee born in 1948employee born in 1948

This employee claiming his pension in This employee claiming his pension in January 2008, with a complete record to January 2008, with a complete record to the maximum social security limit, has the maximum social security limit, has drawn an annual pension of 14 087 € (i.e. drawn an annual pension of 14 087 € (i.e. 43.8% of the social security ceiling) 43.8% of the social security ceiling)

Pre-reform, he would have drawn 16 092 Pre-reform, he would have drawn 16 092 € (i.e. 50% of the social security ceiling) € (i.e. 50% of the social security ceiling)

Source CNAV – October 2007Source CNAV – October 2007

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In the 2000s, new In the 2000s, new reforms…reforms…

Which lengthen the contributions periodWhich lengthen the contributions period Which lower the level of pensionsWhich lower the level of pensions Which index-link pensions to pricesWhich index-link pensions to prices Which, in the civil service, create a Which, in the civil service, create a

compulsory additional scheme according compulsory additional scheme according to points on premiumsto points on premiums

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In conclusion, UNSA In conclusion, UNSA proposals …proposals …

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