Retiring at 62? The French have it absolutely right

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The route for protest marches in Paris runs along our boulevard. The cycle of French life is that, every few years, the government tries to make everyone work longer, until a popular uprising kills the plan. With Emmanuel Macron wanting to raise the minimum retirement age from 62 to 64, the uprising has resumed. The other day I squeezed out of our building, past the Communist party stand in front of our door, on to the street packed with marchers, and scanned the banners: “Giving one’s life to the boss, no!”

I used to take the standard Anglo-Saxon view that the French should get with reality. French 62-year-olds can now expect to live to 85, creating what’s close to the longest average retirement in global history. Work until 65, and you’ll still have 20 years for boules, I always thought. But my life here has been a series of realisations that on the biggest issues — the Iraq war, nuclear power, cheese — the French tend to be right. I’ve changed my mind about pensions. The French have led the world in creating a glorious new lifestage: the first golden decade of retirement. Their system remains just about affordable. Everyone else ought to learn from them.

The Valhalla for French pensioners is a recent invention. In 1970, Simone de Beauvoir wrote that society treated the old person as a “piece of rubbish” with “miserable” living standards. But in 1981, François Mitterrand became president touting a new vision of retirement: “Live at last!” He cut the retirement age from 65 to 60.

Even today, many French workers quit before they reach 60. As companies push out older employees, France is “close to the world record for the inactivity rate of over-55s”, says economist Claudia Senik.

French retirement divides into two distinct phases. Phase two is brutal: decay, widowhood, the old-age home and finally, well, the end. But the French ideal is the golden decade or so of freedom that comes before. In your sixties, your work is done, the kids raised, the parents usually dead, and for the only time in your life, you can do whatever you like.

When French people retire, their health initially improves, notes Senik, presumably because they exercise more. Few drop into the void: in 2003, only 9 per cent described the passage into retirement as a bad period, reported the national statistical institute Insee. French pensioners enjoy higher median living standards than working people, if you take into account the fact that retirees typically aren’t funding children or mortgages.

A retiree I know here regales me with tales of her winters in India, where she and her mates party like teenage backpackers. Danièle Laufer, in L’année du Phénix, cites other happy retirements: starting the day with a two-hour breakfast in the garden, going to a museum exhibition twice so that you can remember it, or tracking down past lovers. Men often reinvent themselves as volunteers, and women as grandmothers.

Much of French adult life is structured in the service of the golden decade. Many people start dreaming of retirement in their twenties. Only 21 per cent of the French say work has a “very important” place in their lives, down from 60 per cent in 1990, reports the Fondation Jean-Jaurès.

Working life is now conceived of as 172 trimesters (for those born from 1973) paying contributions for a full state pension. The sum you pay in correlates only modestly with how much the state will give you at the end. In France, private pensions are rare, and retirement is meant to equalise.

I understand Macron’s arguments for reform. But the current generosity is only modestly unsustainable: France is ageing more slowly than neighbouring countries, its debt-to-GDP ratio of 112.5 per cent is below the US’s, and total pension payments are forecast to remain stable as a percentage of GDP, as pensions won’t continue to keep up with salaries.

Some reforms make sense — for instance, encouraging seniors to work at least part-time, as about 400,000 persistants already do. But it’s unappealing to watch ministers, ­economists and business leaders exhort everyone else to keep working. The exhorters are the longest-lived, highest-earning people in France. Unlike most employees, they get status and pleasure from their jobs.

Here’s my draft proposal for French pension reform: make the top 10 per cent of earners work until, say, 67. Since they are the highest taxpayers, that should help replenish the system. Let ordinary people have fun while they still can.

Follow Simon on Twitter @KuperSimon and email him at [email protected]

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Source: Financial Times


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