France to raise legal retirement age to 64 by 2030

PARIS, Jan. 10 (Xinhua) -- French Prime Minister Elisabeth Borne laid out on Tuesday details of the country's controversial pension reform plan, progressively raising the legal retirement age to 64 and proposing a minimum pension for all retirees.

Speaking at a press conference, Borne announced that France planned to raise, from Sept. 1, the legal retirement age entitled to a full pension, from the current 62 to 64 by 2030 at a progressive rate of three months per year.

Also, she added that starting from 2027, future retirees could receive a full pension if they would have contributed for 43 years.

Borne pointed out that the current pension reform plan would allow people to have a minimum pension of 1,200 euros (about 1,288 U.S. dollars) per month.

"Employees and the self-employed ... who have contributed all their life with income around the SMIC (French minimum monthly wage) will now leave with a pension of 85 percent of the net SMIC," she explained.

Speaking to French TV channel France 2, Borne explained that the government's objective was to "balance our pension system in 2030."

"We conducted several months of consultation, we listened and we were able to see that there was another way to achieve this objective of balance in 2030," she said.

According to the government, pushing back the legal age to 64 by 2030 while accelerating the extension of the contribution period will free up 17.7 billion euros (about 19 billion U.S. dollars) for the pension system. The government's initial plan was to raise the legal retirement age to 65.

If the pension reform plan were to be passed by the French National Assembly and Senate, the first generation concerned by the postponement of the retirement age will be those born in and after September of 1961.

Angered by the pension reform plan, major unions have already announced a major strike on Jan. 19 across the country.

In his New Year address, French President Emmanuel Macron said that the pension reform was necessary to balance the pension system for the decades to come.

In 2021, France's expenditure on the pension system equaled 13.8 percent of the country's gross domestic product (GDP). However, the country's Pensions Advisory Council (COR) said that the share of pension expenditure would rise sharply due to the sharp contraction in GDP and would vary between 14.2 percent and 14.7 percent between 2027 and 2032.

In a report published by the COR in September 2022, the pension system watchdog said that from 2022 to 2032, the country's pension system would be in deficit. (1 euro = 1.07 U.S. dollar)