France: The French pension reform: the bill is adopted

On Monday March 20th, 2023, the French Prime Minister has engaged the liability of her government in order to have the pension reform voted. In application of a specific process provided for by article 49.3 of the French Constitution, a bill presented by the Prime Minister is deemed to be adopted unless a motion of no-confidence (motion de censure), presented within 24 hours, is voted by the Parliament. Two motions of no-confidence have been presented. Nevertheless, since none of these two motions has collected the sufficient number of votes, the text is deemed to be adopted.

Below are the main areas of this reform:

• Increase in the retirement age from 62 years old to 64 years old and increase in the duration of contributions to pensions (increased number of quarters, depending on the year of birth)
• Confirmation and amendment to current exceptions for long careers and medical disability
• Specific measures to improve and extend care granted to workers facing “difficult working conditions”
• Increase of the cost of mutually agreed terminations or forced retirement through the increase of the social security contributions to be paid by the employer in such cases
• Improvement of the possibility to cumulate pension and professional activity
• Promotion of the employment of senior employees through (i) the creation of a specific index designed to assess the employment of seniors and implementation corrective measures and (ii) experimental contract for “senior” employees.

The text is now under the review of the French Constitutional Court, which has one month to issue its decision. Should the Constitutional Court deem some measures incompatible with the Constitution, they would not enter into force.

 

There is, in any case, a strong likelihood that most of the provisions will apply but will be supplemented by decrees.

Key Action Points for Human Resources and In-house Counsel

Human resources manager should get to know about the major points of the reform to be able to answer employees’ questions.