Written by: Lee Che Yan
The government of France cut the country’s retirement age from 62 to 60 in June 2012, indicating that this was a move of “social justice”. To be specific, this law only applies to certain workers; those who entered the workforce at the age of 18, implying that he/she has been paying into the pension fund for 41 to 41.5 years. An estimation of extra expense will be 1.1billion Euros next year; and will rise to 3.0 billion Euros a year by 2017, due to the country’s ageing problem. Nevertheless, the French government ensured and promised to be able to reduce its public deficit to zero by 2017.
Cutting the Retirement Age…
As unemployment rate in France has been the highest since 1999 (See Appendix 1), cutting retirement age will undoubtedly create more job vacancies for youngsters. There will also be more promotion opportunities for the new-blood, assuming that most management levels are the older generation. For instance, people who started working at such early age will ravage their body over the years. Blue collar workers, in particular, will benefit from this newly enacted law.
However, unlike France (See Appendix 2), many other countries are trying to push the retirement ages higher in recent years, because people are living longer, addressing that they will spend more years on “state-sponsored” pension checks. Then, it becomes the government’s intention and responsibility to ensure the national pension system is affordable and adequate.
In consideration of reducing retirement age in France, there will be less working class and therefore, narrowing the tax basis, suggesting that the government will be having less tax revenue. With the problem of ageing population, the situation will be worse, for less people will be contributing to the pensions and supporting the country financially. After all, revisions of laws related to elderly, such as labour laws, social welfare laws, will be necessary, and it will be a long process.
In my opinion, lowering pension age in France was a risky decision, and should not be enacted. Even though this law might benefit some workers, it was a “costly mistake”, as its financial stability and competitiveness of businesses are worrying.
In Hong Kong, retirement protection has also been one of the major concerns in recent years. This is a serious issue that affects everyone and should be treated properly. What are your thoughts?
Hong Kong’s retirement age is 65.
If you are interested in this topic, look into this website (in Chinese); it provides updates about extending retirement age: http://finance.sina.com.cn/focus/tuixiu_2012/
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Unknown. (2012). Pensions: Raising retirement ages and expanding private pension coverage essential, says oecd. OCED: Better Policies for Better Lives, Retrieved from http://www.oecd.org/newsroom/pensionsraisingretirementagesandexpandingprivatep ensioncoverageessentialsaysoecd.htm
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Citation of Top Picture
‘efin2860’. (Artist). (n.d.). Social security is unable to support the weight of america. [Print Graphic]. Retrieved from http://www.cartoonstock.com/newscartoons/cartoonists/efi/lowres/efin2860l.jpg