On pension reforms

by Dana on September 10, 2010

Pension is such a boring topic that most people loathe to think about it within their own country/system.  But much of economic unrests in Europe in the coming decade might come from unreasonable pension guarantees and calculations.

In France, private pensions are almost unheard of for majority of the working population. The only group that has private pensions is the executive class. So post-retirement, most people would rely on state pension to get them through the rest of their lives, which is long if you are French.

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Most French are compelled to save for their retirement through their payroll in a pay-as-you-go fashion, contrary to the combination of work-place pension scheme and private tax-incentived savings we have in North America.  In the French national system, as it is in some large pubic pension funds – CalPERS come to mind – the money paid into the system today is used to fund those that are currently drawing from the pot.

Needlessly to say, as it is in most of Europe, France has a demographic problem and no private savings to back up the public coffers.  But thinking about the issue from a about-to-retire French’s perspective – they have paid into the system for most of their lives with the explicit guarantee that they will be taken care of.  So that’s perhaps why, out of “principle”, shaving a couple of years off their almost 3 decades of post-retirement bliss is something worth protesting about.

It’s probably a bit too easy to be universally dismissive of what’s been fought here.  The leftist obviously points to other figures getting unjustifiably shifted around in the budget in the riches’ favour, while the centre-right accuses the unions to call strikes just for for the sake of striking.

This video is from 2007, but you can run the story and interview word-for-word without edits today, and nobody would know the difference. Must be comforting to the French to know that nothing changes.

PS. Starting at around 9:40, note how comparably small the French unions are, but are somehow able to call on the general public for support.

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    The top 1% of society is at it again! Corporate gov’t needs a jarring wake-up-call, not only in France!