Pensions: the 10 previous major reforms

Pensions: the 10 previous major reforms

The French pension system has been gradually reformed since World War II. From the introduction of the general system in 1945 to raising the retirement age to 64 or 65 in 2023, many changes have been made over the years. Here are the 10 most important reforms.

While in 1673 under Louis XIV the very first profession received compensation for periods of inactivity, various regimes have succeeded one another over the centuries without much success. It was not until 1945, after the liberation, that the pension organization was finally integrated into the social security system that had been created a few weeks earlier.

Since then, the system has been fundamentally based on the distribution principle. The social security contributions of those in work finance the pensions of retirees. While the next reform is due to be unveiled on Tuesday, January 10, it has so far consisted of the general system, additional systems and various special systems.

The Boulin Reform of 1971

On December 31, 1971, the first major pension reform of the post-war period was the Boulin Act, which increased from 120 (30 years) to 150 (37.5 years) the hours of work that gave entitlement to a full-rate pension to the best ten salary years (and no longer the last ten).

The Auroux Reform of 1982

In 1982, an Auroux Decree under the presidency of François Mitterrand granted retirement from age 60, still for 37.5 years of contributions, at the full rate of 50% of the average annual salary. It is also the year of taking a deduction (reducing the pension if you retire earlier) for each missing quarter of contributions to have 150 quarters or reach age 65. With an interest rate of 2.5% per quarter or 10% per year, the cheapest of the thresholds is retained, limiting the discount to 50%.

The Balladur reform of 1993

In 1993, the new prime minister, Édouard Balladur, recorded an unprecedented deficit of around 40 billion francs. This deficit can be explained in particular by the recession triggered by the currency crisis after German reunification. To counteract this, the government is launching a major reform by decree that only affects the private sector.

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More specifically, the contribution period for drawing a full pension in the general scheme is 150 quarters (37.5 years) to 160 quarters (40 years). The required “all systems together” contribution period remains at 150 quarters to abolish the discount introduced in 1982. In addition, pensions are now calculated for the best 25 years of salary (compared to 10 before) and pensions are indexed to inflation. An old-age solidarity fund was set up to finance certain measures (minimum age, family benefits, etc.).

The 1995 Juppé reform

In 1995, on the 50th anniversary of social security, it was Alain Juppé, Jacques Chirac’s prime minister at the time, who presented his pension reform plan. If the goal of reducing the deficit remains the same, this time Alain Juppé attacks the special regulations and initiates the harmonization of the civil service regulations with the general regulation. His plan was triumphantly voted in parliament and approved by the opposition. However, his plan was thwarted by the 1995 strikes and the government eventually backed down.

The 1999 reform under Lionel Jospin

In 1999, under the government of Lionel Jospin, the Social Security Financing Act created the Pension Reserve Fund (FRR). This fund must place its assets on the financial markets in order to form a financial reserve of 150 billion euros by 2020.

This was the date when all “baby boom” aborigines were supposed to retire. The aim is therefore to cushion the consequences of these numerous departures and to smooth out the development of the contribution rates of the general system and the other systems over a long period of time. However, this fund will never receive the promised amounts (nearly 3 3 billion in 2009) and will be used ten years earlier to try to close the deficit observed in 2010.

The Fillon Reform 2003

In 2003 it was François Fillon’s turn to present his pension reform. It attacks all diets except special diets. In this context, the reform envisages gradually aligning the contribution period of civil servants with that of employees in the private sector between 2004 and 2008 (from 37.5 to 40 years). After that, from 2009 it provides for a gradual extension of the contribution period for all systems (except for special systems) to 41 years in 2012.

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In addition, the discount system will also be reformed: it will be relaxed for employees in the private sector and a bonus system will be created (increase in pension in the event of late departure). For civil servants, on the other hand, the reform provides for the expansion of the discount system and the indexation of pensions to inflation and no longer to the index point of public service.

Finally, an early retirement scheme for long working lives was put in place, allowing those who started working between the ages of 14 and 16 and contributed the time needed for their generation to retire before the age of 60.

The 2007 reform under Nicolas Sarkozy

In 2007, the new President of the Republic, Nicolas Sarkozy, kept one of his great campaign promises: reform of the special pension systems. Its objective, which came into force in 2008, was to increase the contributory period for employees of public bodies of an industrial and commercial nature (EDF, GDF, SNCF, RATP, Banque de France, Opéra national de Paris, Comédie française, etc.) and professions with status (elected officials and employees of the National Assembly and Senate, clerks and employees of notaries) in the private and public sectors.

Three guiding principles drove the reform forward: the gradual increase in the contribution period from 37.5 years to 40 years, the establishment of a discount/premium mechanism and the indexation of pensions to price changes.

The Worther Reform 2010

In 2010, the government, still under the presidency of Nicolas Sarkozy, implemented the Woerth reform, which included measures on the rights of insured persons (statutory retirement age, full-rate liquidation age, etc.), but also provisions on crediting cases of hardship and career breaks (maternity, unemployment, etc. ).

More specifically, the minimum retirement age will be gradually raised to 62 in 2018 for all public and private workers and special schemes, but with different timetables. The age at which an insured person who has not made sufficient contributions can receive a full-rate pension will be raised from 65 to 67.

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The reform also provides for the introduction of an early retirement scheme for heavy work: Employees with a permanent disability of at least 20% or even 10% can now take full retirement when they reach the age of 60. Better consideration of maternity leave and periods of unemployment without compensation at the beginning of working life (young unemployed without compensation can claim up to 6 quarters instead of 4) were also introduced.

The Touraine reform in 2014

Under the presidency of François Hollande, the reform initiated by Marisol Touraine in 2014 enshrines the principle of gradually increasing the number of pensions until full pension is reached, up to 172 quarters (43 years) in 2035. The emblematic measure for this reform is the institution of the personal hardship account (C3P, now C2P). This account, established from 1 January 2015, is intended to take account of the reduction in life expectancy resulting from a working life exposed to hard factors (noise, carrying heavy loads, etc.) when calculating pension entitlements.

In addition, an enforceable entitlement to a pension will be introduced so that future pensioners will receive their pension automatically and without delay, the rules for accrual of quarters will be modified to improve the situation of pensioners who have received low wages or who have been working part-time when they are on maternity leave fully taken into account when calculating the insurance period (so far only the quarter of birth has been validated).

Finally, this reform improves farmers’ pensions and includes several provisions in favor of disabled workers and carers. It increases the amount of the solidarity surcharge for older people (with no minimum age) and establishes a pension monitoring committee to improve the administration of the pension system.

The Macron reform in 2023

That is the government’s top priority. The pension reform promised by the President of the Republic in his first campaign and then postponed until his second term is now the top priority for the government at the beginning of 2023. It will be officially presented this Tuesday, January 10th.