Why is the French pension age so low?
THEY FRENCH are once again taking to the streets to protest against a plan to raise the minimum retirement age—this time from 62 years old to 64. The proposal was unveiled by the prime minister, Elisabeth Borne, on January 10th and it is now winding its way through parliament. In France it is deeply unpopular: 68% oppose the reform. But viewed from elsewhere in Europe, it looks remarkably modest. Why is France’s pension age so low?
Most Europeans are much older than 62 when they begin to receive state-pension payouts. Britain’s pension age is 66. Germany’s is 67. France has two pension ages: a legal minimum of 62 years, at which a full pension is paid if the required number of contributions has been made, and 67 years, at which point a full pension is paid regardless. The new rules would increase the required number of annual contributions from 41 to 43.
Complex national rules on credits and exemptions mean that, in reality, many Europeans retire earlier than their country’s pension age. The average British man is 63.7 years old when he retires; the average woman is 63.2. German men retire at 63.1 on average and women at 63.2. In France the average age is still lower: men retire on average at 60.4 years and women at 60.9. Thanks to high life expectancy, the average length of time spent in retirement in France is, for men, the second-highest in the OECD (after Luxembourg); for women it is the third-highest.
This puts particular pressure on the French system. Pensions are funded by mandatory hypothecated payroll charges on those in work for those in retirement at any given moment. Today there are only 1.7 people in work in France for every pensioner, down from 2.1 in 2000. That figure is projected to fall to 1.3 by 2070.
A mix of history and political culture explains France’s low retirement age. The country’s earliest pension regime was set up for the navy under the ancien régime, in 1673. To this day, certain categories of workers, such as dancers at the Paris Opera or railway workers, enjoy early retirement rights based on such historical schemes. And the SNCF, the national railway, employees can retire as early as 52-55 years. Modern rules governing pensions were introduced in 1945, with the birth of the French welfare state. At the time, the retirement age for a full pension was 65 years. It was not until François Mitterrand, a socialist president, swept to power in 1981 on a promise to enhance workers’ rights that France lowered its pension age to 60.
Ever since then, any attempt to oblige the French to work for longer has stirred indignation and resistance. Like the 35-hour working week, the lowering of the retirement age in France has become part of national mythology: the celebration of progress towards a better society in which the burden of work is eased. In 1995 paralyzing strikes greeted Jacques Chirac’s (failed) attempt to raise the pension age. In 2010 huge protests met Nicolas Sarkozy’s (ultimately successful) decision to increase the age from 60 years to 62. President Emmanuel Macron’s attempt to push the threshold to 64 may look modest on paper—but it is as symbolically bold as it is politically risky. ■