Retirement: winners and losers of Marine Le Pen’s reform

Don’t touch the 62-year-old totem pole. Marine Le Pen does not intend to return to the legal retirement age, unlike her competitor Emmanuel Macron who wants to bring her back to 65. She even intends to anticipate it for those who started working early. The reform you propose is based on the age of entry into working life. Therefore, if you started working before the age of 20, you can retire at the full rate from the age of 60. For this, you must have contributed for at least 160 quarters, or 40 years.

Hence, the starting age would gradually change for those starting work after 20 years. So, if you entered working life at 21, you can retire at 61.5 and, to get the full rate, you must have paid 163 quarters. The statutory retirement age would remain at 62 for those who started working at 21.5 and over. To get the full rate, the duration would also gradually increase. It would not exceed 168 quarters, or 42 years for those who started working at 24 and over. This is one year less than expected today for generations born from 1973 onwards, with the 2014 Touraine reform. The cost of this measure is estimated by the campaign team at 9.6 billion in 2027, when it enters in full force.

End of the professional account of prevention

It will be understood, Marine Le Pen’s declared intention is to encourage young people to enter the job market as soon as possible. A laudable intention on paper, but one that raises a number of questions. “First of all, we need to clearly define what it means to start entering the world of work”, warns François Ecalle, former general rapporteur of the Court of Auditors and president of Fipeco, an information site on public finance. Today there is already a device called “long career” that allows people to retire earlier for those who started working as a young person. To benefit from it, you must have worked at least 4 quarters before the age of 20. “For example, let’s consider that a manager who has completed work-study training before the age of 20 will be able to retire at full rate for 160 quarters,” asks Henri Sterdyniak, economist at the French Economic Observatory (OFCE) and member of the group of shocked economists. “Same question if you did a summer job before you were 20,” he adds.

With this reform, the National Meeting effectively combines two measures: the professional prevention account, which allows, according to certain criteria (night work, extreme temperatures, exposure to noise, etc.), to retire early, and the plan long career. This leads, again, to other side effects. Thus those who started working after the age of 21.5 but who have carried out a so-called arduous activity will no longer be able, as is the case today, to retire before the age of 62. “It is true that even if these two devices are different, very often there is a correlation because those who started to work early exercise professions for which certain criteria are included in the prevention account”, acknowledges François Ecalle. However, there is the question of the difference between public and private. “By keeping the special regimes and removing the prevention bill, we are not solving the difference in taking into account the discomfort between public employees who will always be able to retire earlier and private sector employees who will no longer see their discomfort. This is the case, for example, with health workers, “said Henri Sterdyniak.

No changes for cut careers

Another trap of Marine Le Pen’s plan: the announced reform also excludes those who have had an unstable career. Even if the contribution period to obtain the full rate has been reduced from 43 to 42 years … they will still have to wait until 67 years of age to automatically benefit from a full rate pension. This is the case, for example, of a woman who worked part-time or who stopped working to raise her child. Even if you started working before the age of 20, you will not necessarily have contributed for 40 years and therefore you will not be able to retire at 60. “I don’t intend to touch this automatic age of the full fare at 67,” said Marine Le Pen. But I don’t lose sight of the fact that there could be a dynamic of improvement that would allow it to be lowered ”, she still considered her. “To help these cut careers, for example, it would be necessary to change the rules for the validation of quarters,” notes Dominique Prévert, of the specialist firm Optimaretraite. Today to validate a quarter you must have worked the equivalent of 150 paid hours at a minimum, or € 1,585.50.

Finally, the issue raised by this reform is the link between basic pension and supplementary pension. The state can only act on the basic pension. If we take the example of Agirc-Arrco, a pension plan for private sector employees, a reduction in the number of years of contributions to obtain a full pension could have an impact on the finances of this plan. In fact, today there is a bonus / penalty system, put in place to guarantee the balance of the regime. For example, if you leave at 62 with the full rate, your supplementary pension is discounted by 10% for 3 years. You have to work an extra year to get the full rate for your supplementary pension.

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Therefore, for a person born in 1973 or later, they must have contributed for 44 years (43 years for the basic full rate pension plus one year for the full rate supplementary pension). By lowering the contribution period to 42 years to obtain the full rate, mechanically to have a full rate supplementary pension, it will no longer be necessary to pay 44 years but 43 years. From a financial point of view, this therefore means lower inflows of contributions for the Agirc-Arrco scheme. “It is not certain that the social partners that manage Agirc-Arco appreciate this type of measure”, estimates Nicolas Marques, economist and director general of the Molinari Institute.

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