France: Adoption of pensions Bill
On 24 July, the upper house of the French parliament voted to adopt the pension reform Bill. The first reading of the Bill lasted 19 days - the second longest reading in the national assembly since 1981 - with the discussion time reaching 156 hours 57 minutes.
The government's controversial proposals for wide-ranging pension reform gave rise to several days of protest and strikes throughout France (France: Controversy over planned pension reform). The government, however, remained firm, and is proceeding with its planned timetable.
The first reading of the Bill had to cover thousands of amendments, most of which were submitted by the communist members of the parliamentary opposition as part of their strategy to delay the legislation (France: Debate on pensions Bill). In the end, 453 amendments were adopted and the Bill was passed on 3 July and referred to the upper house, with the addition of 27 Articles.
Social affairs minister, François Fillon, welcomed the vote, which, he said, would "secure the future" of everyone's pensions. He called the reform "the most important since the Liberation", and congratulated the majority of the deputies on their stoicism, faced by such a "concerted attack" from the left.
The question of older people in the workplace was one issue that gave rise to much discussion, and the government has promised to hold a tripartite conference, designed to examine the difficulties associated with the active participation in the labour market of people over the age of 50.
The amendments to the legislation include the following:
- an obligation for negotiators of future company agreements to consider the question of employment of people of 50 or older, their access to personal development, and arrangements for the end of their careers;
- the addition of a paragraph into the Labour Code prohibiting the use of age-related criteria in job advertisements;
- a reduction in the sum of the specific contribution towards company early retirement schemes, according to conditions fixed by decree, until 31 May 2008, in the case of benefits paid within the framework of early retirement schemes that provide for the maintenance of a level of old-age insurance coverage which is equivalent to that which a retiree would have received if they had remained in work; and
- a commitment that the government will present a report on the negotiations between the social partners on a definition of "strenuous" work (la pénibilité) and its implementation within three years. The social partners will also be obliged to include this issue in their sectoral negotiations on collective agreements every three years.
A further issue that underwent some changes during the parliamentary discussions is that of a savings plan dedicated to retirement. The plan that was originally envisaged in the draft Bill, whereby employee savings schemes (PPESV) were to become retirement savings schemes (PPESVR), has been replaced by an individual savings scheme (PEIR). A key change is the amelioration of the tax regime concerning contributions towards a retirement fund, to come into force from the 2004 tax year. According to the new regulations, the following will apply:
- the repurchasing of missing years' contributions for periods of study will be tax deductible;
- the contributions or bonuses paid into the new PEIR schemes as well as those made into other supplementary retirement schemes will be tax deductible up to an annual ceiling; and
- the exemption on employer social security contributions with regard to supplementary retirement schemes, sickness insurance and PPESVR employee retirement savings schemes which were taken out of the original draft have been put back into the final text.
