2023-09-17 17:48:14
Faced with galloping inflation, the French government is committed to increasing pensions. A direct response to rising prices, particularly those of energy, but is this really news for retirees?
Inflation, this specter that hangs over purchasing power
L’inflation in France is experiencing a marked increase, reaching 4.9% in August. This rise is mainly driven by the “clear rebound” in energy prices. While this situation weighs heavily on the daily lives of the French, the government is trying to put in place measures to mitigate the impact on purchasing power. Faced with this picture, the Minister of Public Accounts, Thomas Cazenavespoke on Franceinfo to announce a flagship measure: the indexation of basic pensions, those administered by Social Security, to inflation from next January.
A seemingly generous announcement, but…
Protecting the purchasing power of retirees is the government’s main promise. But this recent announcement hides a less rosy fact. The article L.161-25 of the social security code already determines that retirement pensions must be indexed to inflation. This provision saw the light of day with the Balladur reform of 1993. Before this period, pensions were linked to changes in salaries, a formula much more advantageous for pensioners but more burdensome for the state coffers.
However, looking more closely, history shows that this principle has not always been respected. Take the example of 2019: pensions saw a modest increase of 0.3%, well below inflation which stood at 1.8%. This trend towards under-indexation was confirmed in 2020 for certain retirees. Fortunately, 2022 sounded a more positive note with two successive revaluations, in January then in July, in line with the increase in prices.
The burning debate around supplementary pensions
If the question of basic pensions has generated a lot of ink, that of Agirc-Arrco supplementary pensions is not left out. The latter should see their amount revalued on November 1st. But as this deadline approaches, employers and unions find themselves at the heart of intense negotiations. The rate of increase in pensions remains at the center of discussions, as does the thorny issue of removing the 10% penalty introduced in 2019.
The indexation of pensions to inflation: a necessary measure for purchasing power, but already written in stone in our laws. The question remains: will the government respect its commitment this time?
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Tags : Pensions, Inflation, France, Social security, Thomas Cazenave, Balladur Reform, Pensions, Agirc-Arrco, Purchasing power.
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