PARIS: French President Emmanuel Macron may have pushed through his unpopular pension reform but only at great cost to his political capital, which he is now seeking to repair by offering talks with trade unions on other issues.

Given that his pension plan, which raises the statutory retirement age from 62 to 64, merely puts France more in line with its European Union neighbours, some foreign commentators have wondered what all the protests and public anger were about.

But that fails not only to grasp why the French saw the 62-year retirement age as a cherished social benefit but also the concerns of the many workers whose personal situations meant they were excluded from it and now face later retirement.

Can the French retire earlier than others in Europe?

In theory, yes. Along with Greece, France currently has the lowest statutory retirement age in the European Union, where the average across the 27-nation bloc is 64.8 years.

Comparatively lower retirement and high life expectancy mean that the French do indeed spend longer in retirement than many other countries, according to data from the Organisation for Economic Cooperation and Development (OECD).

The OECD calculates that a French man typically spends 23.5 years in retirement, second only to Luxembourgers’ 24 years and well above the 20 years that men in Britain and Germany spend retired.

French pension payments as a share of pre-retirement earnings are comfortably higher than elsewhere. A French retiree’s pension post-tax income comes in at nearly three-quarters of their pre-retirement earnings compared with 58 per cent in Britain and nearly 53pc in Germany, according to the OECD.

Such largesse comes at a cost. France spends nearly 14pc of economic output on its pension system. That is nearly double the OECD average of 7.7pc, with only Italy and Greece spending more than France.

But such high spending helps keep France’s poverty rate for retired people among the lowest in the developed world at only 4pc of the population compared with an OECD average of 13pc while inequality rates are also lower than average.

Does everyone benefit?

France stands out for its low standard retirement age, the picture is less clear cut than it first seems because when a worker retires also depends on how long they have made contributions to the pension system.

The period workers are required to pay in is gradually being raised from 42 to 43 years, and Macron’s reform brings forward the 43-year target to 2027 from 2035 previously.

More than one third of French workers already leave the workforce later than 62, according to the Conseil d’Orientation des Retraites, an independent panel that provides pension analysis for the government.

Often people who started working late because of higher studies or who took time out from their careers to raise children have to work well past 62. Anyone can now and after Macron’s reform retire at 67 with a full pension regardless of how long they pay in.

Published in Dawn, April 19th, 2023