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French Pension System

French Pension System

France's "pay-and-go" pension system for generation’s solidarity was created in 1956 when all the people over 65 could benefit from the national fund of solidarity. Then the retirement age returned to 60 with two systems co-existing: the public system and the public one.

France's "pay-and-go" pension system for generation’s solidarity was created in 1956 when all the people over 65 could benefit from the national fund of solidarity. Then the retirement age returned to 60 with two systems co-existing: the public system and the public one.

Due to the economic recession and the growing CNAV’s deficit, 3 main reforms were implemented in 1993, 2003 and 2008. The effective contribution increased as the pension was based on price inflation. The retirement age did not change in 2003 with Fillon’s reform but the contribution increased so that an employee needed a 41 years contribution. In 2008, this contribution increased with a progressive extension. With a minimum pension guaranteed, the employees could have a job and benefit from a pension.

However, with the people ageing and the decrease of birth rate, the pension system is still in danger and an increasing number of senior people must work not to be under the poverty line.

Of course, the French government wants to preserve the existing pay-and-go pension system without increasing the pension contribution in order to solve the problems of deficit, which means changing the retirement age to 62 at least and encourage senior to work longer

About the Author: Hélène Billiet is the founder of Lyoncityblog , an English speaking site about Lyon region.
Image by Ivan Walsh, 2 Euro Coin, France via Flickr, Creative Commons Attribution.

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