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ORIGINAL FRENCH ARTICLE: Retraités, une facture de plus en plus salée

by Yves Housson

Bill For Retirees Going Up And Up

Translated Wednesday 11 September 2013, by Gene Zbikowski

The freezing of retirement pensions for six months each year foreseen in the Ayrault reform comes on top of, among other things, the end of automatic increases to compensate for inflation in private pension schemes. This was imposed by the bosses in March. In all, retirees are losing nearly 5 billion euros.

“They’re causing retirees to doubt – are they desired in this society?” François Thiery-Cherrier still has not got over the underhand blow. It’s the first time, the general secretary of the CGT confederation union for retirees said, that a retirement reform has not only affected active workers but also retired ones.

The Ayrault project will make them pay doubly. On the one hand, it will delay by six months, from April 1 to October 1, the date of the annual increase in pensions to keep pace with inflation. Whereas the head of government boasted of having rejected the Moreau report proposal to eliminate increases to keep pace with inflation, the measure truly represents a freeze on pensions, which will lose purchasing power over a six-month period – and even over eighteen months in the first application of this measure, between April 1 2013 and October 1, 2014.

According to the official figures, it will lead to “savings” of 1.4 billion euros (in 2020) for the retirement funds, and hence a loss of as much to the wallets of the 15 million retirees. The only failing admitted to by the minister for social affairs, Marisol Touraine – the old-age minimum (the solidarity benefit for the elderly) will continue to be increased to keep pace with inflation in April.

The second measure consists in taxing the 10% pension increase granted to retirees who have raised three or more children. This is an additional tax, for those retirees who pay income tax, of 1.3 billion euros. And, simultaneously, it is another negative signal in family policy, after the reductions in the family benefits entitlement code which were decided before the summer.

For François Thiery-Cherrier, these are two knife blows to the social contract with retirees. “Retirees’ money is the fruit of contributions that they paid in. You can’t change the rules in the middle of the game.” For the trade union leader, the pill is all the more bitter as it comes on top of an already-heavy cocktail of measures.

Since April 1, retirees have been subject to a 0.3% tax dedicated to financing measures to delay the entry of the elderly into retirement homes. At the same time, under pressure from the MEDEF (the main organization of French bosses) and with the agreement of the trade unions (except for the CGT), the private pension schemes Arrco and Agirc decided, for the first time, to keep increases in pensions below the level of inflation over the next three years. This is a gain for the pension funds, and a loss for the retirees, of 2.2 billion euros. And this is not all.

The Ayrault government has only just – in the way of a (quite meager) social compensation – eliminated the freeze on the income tax schedule decided upon by his predecessor. The effect of this freeze was to make many retirees’ income subject to income tax – and to make them lose at the same time many of the associated social and tax advantages, such as free public transport, exemption from municipal taxes and from the audiovisual use tax, etc. On the other hand he did not reinstate the tax reduction granted to widows, widowers, and other single retirees, which has the same potential consequences.

Recourse to solidarity

To justify making retirees pay more, some mention the fact that retirees supposedly have a standard of living that is practically equal to that of active workers. Statistically, this is true on condition that you take the legitimately-acquired private property, built up in the course of a working life, into account. The social reality is quite different.

With, on average, a retirement pension of 1256 euros and whereas 4.8 million retirees get the contributory minimum (687 euros a month), a growing number of retirees are forced to appeal to solidarity to make ends meet, to heat their homes and to feed themselves. Visits to the Restos du coeur (soup kitchens) and the Secours populaire français (a charitable organization) are on the rise. A report by the municipal centers for social assistance indicates that there has recently been an increase in demand from retirees.

Trade union leaders are warning against the risk of thus triggering a conflict between generations. The more retirees are considered to be a variable that can be used to balance the budget, whereas other sources of financing are spared or are barely scratched, such as shareholders’ dividends, the more “a feeling of guilt is created among retirees, in relation to the problems faced by young people,” one trade union leader emphasizes, pointing to the danger of “pushing them [retirees] into the arms of the populists.”

Four retiree union organizations – those of the CGT, FO, FSU and Solidaires – are calling for participation in the Sept. 10 mobilization to make the government eliminate the two measures inflicted on retirees, and to make it commit itself to a pension hike.

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The CGT is organizing four big meetings.

The return from holidays is being conducted briskly at the CGT. For the first time, at least so early in the new labor year, the confederation is organizing four big meetings, which are to bring together 10,000 activists, with the participation of Thierry Lepaon. The first was held in Nantes on Sept. 2, the next will be in Montpellier on Sept. 3, the third in Paris on Sept. 5 and the last one in Lyons on Sept. 9. The CGT thus intends to ensure the success of the all-industry and cross-union mobilization planned for Sept 10, together with FO, the FSU, and Solidaires. The day of action also comes unusually early. But will social emergencies wait? The reform of retirement schemes, the financing of social protection, jobs, wages are subjects that are closely linked and on which the bosses are exerting a lot of pressure, to which the government is not insensitive… Beyond the discussions which have taken place, and those which are promised for the future, the CGT thinks it is indispensable for the workers to “burst into” the debate.

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