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Pension reforms go to cabinet

Reforms will affect all workers, public and private, but what are they?

THE government’s project to reform retirement laws is being discussed by the cabinet today.

The reforms affect all workers in public and private sectors. They include:

Employees in the private sector (not those who are self-employed in the artisan, liberal professional, commercial or farming sectors) will be grouped together under the same retirement regime. This will cover 69% of workers.

The time spent paying into the system to receive a full pension (durée de cotisation) will remain at 41.5 years for retirees born in 1955-57. It will be gradually increased for those born in 1958 to reach 43 years by the time that those born in 1973 retire in 2035.

Payments into the system, the cotisations vieillesse, will be raised by 0.15 points for both employees and employers from 2014, then further 0.05 rises in 2015, 2016 and 2017.

Workers in physically demanding jobs will acquire extra points that can allow them to retire early.

The extra 10% bonus on pensions for retirees with three children or more will no longer be tax exempt.

Pensions will be revalued on October 1 instead of April 1.

Civil servants will have their pension contributions and length of contributions calculated in the same way as those in the private sector. These contribution levels were already set to merge with the private sector following the 2010 pension reforms of President Sarkozy.

Those on special government pension regimes will also see the length of time they must contribute and the amount they must contribute, rise to the same level as the private sector by 2018.

For both special and normal government pension regimes, those in physically demanding jobs will be given points that can be converted into early retirement.

The legal age of retirement of 62 will remain unchanged, however with the increase in the length of time needed to pay into the system, few retiring at this age will have full pensions. (This also applies to those on special pension regimes who can retire aged 52 or 57.)

It will still be possible to work until 67 and retire on a full pension, regardless of length of contributions.

Photo: Flickr/Digital Internet

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