Need a “maybe” as there isn’t enough information, and it doesn’t seem like a well thought out piece of legislation with buy-in from the majority hence skipping a parliamentary vote.
(1) Other Pension Options. In the US a viable option is to remove the salary cap of $160K which 6.2% is applied. When someone makes more it lowers their effective rate, e.g. someone earning $320K is only paying 3.1%
(2) Other Legislative Options. Macron used the French equivalent of the “nuclear” option. While the legislation was passed without a vote, and Macron survived a no confidence vote the opposition still has many more options available.
(3) Opposition Next Steps may result in overturning thus legislation before implementation of at least delay it.
Macron tried this previously in 2018-2020 but strikes were averted when the moderate unions didn’t participate in the strike, and Macron put the legislation aside due to the COVID pandemic.
The Pension Advisory Council Report is inconclusive on solvency, and even suggests Macron is doing this to cut taxes on businesses.
In addition working longer puts more people into the workforce leading to unemployment usually for older workers since they cost business more resulting in higher welfare costs for unemployment.
The French still retire earlier than other EU countries so it sounds like Macron thinks he can raise the age to the EU average, save some money so he can finance tax cuts for business. While this is an option it should be compared to other options, debated in parliament & voted on, not just rammed through.
The opposition will pursue other options available to them besides a no confidence vote that will delay implementation and maybe even overturn it.
(1) Constitutional Council appeal suspends implementation
(2) referendum which requires a complex combination of parliamentary and voter endorsements.
“A September 2022 report by the Pensions Advisory Council (Conseil d’orientation des retraites), a state body, found the pensions system actually produced surpluses in 2021 (€900 million) and 2022 (€3.2 billion), although it did predict the system would run a deficit on average over the next quarter of a century. According to the council’s estimate, “between 2023 and 2027, the pension system’s finances will deteriorate significantly”, reaching a deficit of between 0.3 and 0.4 percent of GDP (or just over €10 billion a year) until 2032. But the council said it estimates a gradual return to breaking even, even without reforms, beginning in the mid-2030s.”
“A deficit of €10 billion to €12 billion per year is not necessarily excessive for a pension system whose total annual expenditure amounts to around €340 billion. “The results of this report do not support the claim that pensions spending is out of control,” the council wrote. The report also noted that pensions spending as a proportion of GDP is expected to remain stable, at around 14 percent of GDP, before rising to up to 14.7 percent by 2032.”
“The pensions report makes it clear that the current system is not necessarily in danger, said Michaël Zemmour, an economist and pensions expert at Paris 1 University. “
“No doubt there will be something of a shortfall, he said, but not the kind of deficit that would require raising the retirement age.”
“Zemmour noted that a document France sent to the EU last summer outlines how Macron is planning to pay for proposed tax cuts with structural reforms to get the national deficit under 3 percent – as required of EU member states – by 2027. “It’s not about saving the pension system, it’s about financing tax cuts for businesses,” he said.”
“the French still retire earlier than in many neighbouring countries. According to the Pensions Advisory Council, the average age at which French nationals begin tapping into their retirement funds was 62.6 for women and 62 for men in 2019. That same year, the average age in Italy for both sexes was 63, 64 in Germany and 66 in the Netherlands, with women on average retiring a few months later than men.”
““When the retirement age goes up, a lot of people who are already out of work can’t find a job toward the end,” he said. “…So a lot more people will be out of work for longer in the run-up to their retirement. And that means a sharp increase in the number of people receiving welfare benefits, particularly disability benefits.”
“The defeat of the no-confidence votes on Monday cleared the way for the adoption of new pension legislation, but the law does not yet have the green light for implementation.”
