Enacting an early retirement age of 66.5 years: CGT achieves self-sufficiency independently
The Retirement Orientation Council's (COR) latest annual report suggests a radical solution to combat the looming funding crisis in the retirement system: pushing the retirement age to 66.5 years by 2070. But this proposal has caught a storm of criticism, especially from labor unions like the CGT.
"The Retirement Orientation Council has become a pawn in a single, self-serving policy", grumbles Denis Gravouil, the secretary general of the CGT, speaking on Franceinfo. He goes on to accuse the president of the COR, Gilbert Cette, of playing a double game and criticizes his close ties to President Emmanuel Macron.
According to Gravouil, if wages were higher, France could increase contributions to the retirement system, as there's a problem with low wages, particularly at the minimum wage level. He also stresses the need to increase the activity rate to ensure more contributions can be made, stating that there are millions of people who'd love to work.
CGT Sounding Off About the COR's Proposal
The CGT, however, isn't buying the COR's proposal. Gravouil also calls attention to employer fraud on contributions, which the government estimates amounts to between six to eight billion euros. According to him, there's no need to worry about financing the retirement system and abolishing it - we can do it all without a hitch.
So, what does the COR's annual report say about the retirement age? It predicts a gradual increase to 64.3 years by 2030, 65.9 years by 2045, and 66.5 years by 2070. In 2030, the COR had previously forecast a deficit of 0.4% of GDP, but it has now revised this figure downwards, estimating a more manageable 0.2% deficit. However, by 2070, the situation is expected to deteriorate to a deficit of around 1.4% of GDP.
The Fiscal Times: A Retirement Age Tick Tock
The CGT isn't alone in its criticism. The vice-president of the National Assembly has also expressed that increasing the retirement age to 66.5 years by 2070 isn't entirely unreasonable. But this revelation doesn't quiet the unions or the critics, who argue that such a move would have disastrous consequences for the workforce and the economy.
With the retirement age being pushed back, some fear that France could face labor market tightness, as more people continue to work longer. This could also lead to increased demand for healthcare and elderly care services, necessitating investments in infrastructure and services dedicated to elderly care. Moreover, maintaining and updating skills among the aging workforce will be crucial to ensure that older workers remain productive and adaptable in a rapidly changing job market.
The CGT's complaints also touch on the need to address employer fraud on contributions, which amounts to billions of euros, potentially offering an alternate solution to fund retirement and abolition. While the COR's proposal might save the retirement system from impending bankruptcy, it's clear that striking a balance between economic, social, and labor market considerations will be necessary to ensure the success of such reforms.
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* Retirement reform * CGT * Deficit
- The CGT, echoing The Fiscal Times, has expressed concern about the potential impacts of the Retirement Orientation Council's proposal to increase the retirement age to 66.5 years by 2070, arguing that it could lead to labor market tightness, increased demand for healthcare services, and the need for investments in elderly care infrastructure.
- In addition to criticizing the COR's proposal, the CGT has also emphasized the need to address employer fraud on contributions, as it amounts to billions of euros, which could potentially serve as an alternative solution to fund retirement and abolition.
