French Prime Minister Reveals Pension Reform Plan

New system will be consolidated from 42 separate plans into one.

In a bid to end worker strikes that have paralyzed France for a week, French Prime Minister Edouard Philippe has announced the government’s plan to reform its pension system.

“The time has come to build a universal pension system,” said Philippe at a news conference in Paris. “We are proposing a new inter-generational pact.”

Phillipe, who revealed the plans in a speech at the Economic, Social and Environmental Council in Paris, touted the new system as being fairer than the old one, and one that would provide improved benefits for women and part-time workers.

Under the plan, the government will consolidate 42 distinct pension plans according to occupation and region into one overarching universal plan. The reformed pensions system will be based on points, which is intended to give everyone the same rights for the amount of money they pay into it.

The legal retirement age will remain at 62, but includes incentives to keep working until age 64, which Philippe said will allow for a balanced pension budget by 2027. Retirees who have worked a full career, which in France is just under 42 years, will receive a minimum of €1,000 ($1,119) a month.

Philippe said the retirement system has been strained because there are only 1.7 people working to support each retiree, compared with 4.5 when the system was created in 1945.

“We know our children won’t have the same linear careers we had and we need a pension system that allows that,” Philippe said, according to Reuters. “We need to have faith in a system that is not deemed to favor one person over another.”

The General Confederation of Labor (CGT), France’s largest railway workers’ union, panned the new plan for the retirement system, and called for its members to continue to strike. The union said the plan does not question the ceiling of the 14% of the GDP devoted to the financing, nor the €120,000 annually of the wages subjected to contribution.

“The government has decided to remain silent to the anger of the workers in struggle and to go into force,” CGT said in a statement. “Faced with a deaf government, the trade unions reaffirm their call to strengthen the mobilization by the strike.”

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