The 2023 Social Security Financing Adjustment Law raises the retirement age from 62 to 64, with a requirement that the retiree has worked at least 43 years; otherwise, workers must wait until they turn 67.
Having made a controversial overhaul of the French national pension system, Emmanuel Macron has succeeded where two former presidents, Jacques Chirac and Nicolas Sarkozy, failed.
The 2023 Social Security Financing Adjustment Law raises the retirement age from 62 to 64, with a requirement that the retiree has worked at least 43 years; otherwise, workers must wait until they turn 67.
As in many industrialized countries, declining birth rates and longer life expectancy boosted projected benefits expenditures, raising the question of how to fund them. Macron chose to keep older workers working longer. Massive and persistent protests in France show the strength of public opposition to his approach, not only from older people seeking to leave the workfroce but also from young workers seeking to enter it.
The EU average retirement age stands at around 64 years. Many countries are likely to consider raising taxes or increasing the retirement age. If other EU states follow France’s lead, it would significantly impact businesses operating across borders, says Julia Vorontsova, CEO of Innovation Park, a Belgium-headquartered company that helps businesses to expand and diversify in the EU.
“If other countries start raising their pension ages,” she argues, “it could create significant challenges for businesses operating in multiple jurisdictions, particularly in terms of compliance and managing cross-border workforces.” This could lead to increased costs. Another consideration for businesses is that a uniform higher retirement age does not take account of patterns in particular professions and the differing physical demands on blue- and white-collar workers.
While there are no easy fixes for the challenges of aging populations, the issue is not something that can be kicked down the road indefinitely. But Macron has demonstrated the dangers of one approach.
