Wednesday, July 14, 2010

France to raise retirement age to Singapore's.....

The French workers are up in arms about the increase in retirement age and massive protests will be organised soon.

France's biggest union, the CGT, has told the government to go back to the drawing board and come up with another plan, calling it a "flagrant injustice" that puts the burden of reform on workers.

Retirement in France is not the same as retirement in Singapore. The French medical system is number 1 in the world and free for everyone. The public and private sector workers are on pension schemes while in Singapore the retirement age of 62 is can be quite meaningless for many people because there is no pension or welfare scheme and many will not accumulate enough to retire at that age anyway. The minimum sum in CPF is just sufficient for basic living (I hope) and has been recently stretched further with CPF Life. You retire on what you can accumulate and if you can't, you keep working and working.

Pension reform is not something of choice for France. They must do it to get their deficits down and restore fiscal discipline. Even the French unions agree that something has to be done. What they disagree with is Sarkozy's plan which they consider unjust:

Under the plan, French workers will have to pay contributions for a longer period and some new taxes will be imposed on high-income earners and on capital gains to help plug a gaping hole in pensions funding.

The unions want the hole to be plugged by increasing taxes for banks and taxing capital gains and for the retirement age to remain the same. Sarkozy's plan vs the union's being hotly debated in France and are generally the only 2 approaches being discussed there.

"I'm expecting demonstrations. I know that people are suffering. What will make a difference will be our idea of what is just" - Sarkozy

In Singapore the govt has implemented a system in which each person pays for his own retirement. It is drilled into Singaporeans' minds that this is the only way to do it. Whether this is a good system or not depends on what you want to optimise quality of life, economic growth or social justice. In France, moving the retirement age to 62 is considered great suffering for ordinary people even by a president who is a pro-business rightwinger....the PAP govt will be shifting retirement age to 65 in 2012 and eventually 67 later on[Link]. In France, sharing the fiscal burden among business, high income earners and ordinary workers is considered unjust by many - but in Singapore the retirement burden is borned solely by workers themselves and a large segment work for low wages will never accumulate enough to retire.

Is the Singapore system good? It is good only when income inequality is small ...then your quality of retirement life relative to others depends on your own discipline to save, and the system achieves both low taxes and high social equity. However, when income inequality is high, the system amplifies the inequality - lower income groups are forced to save degrading their quality of life and those who are too poor don't have enough to set aside cannot even retire. Singapore has the largest income gap among developed nations and the retirement system amplifies this large gap....As our income gap increases, this 'every man for himself' system will further divide our society and erode social cohesion. France has a much smaller income gap yet it concerns it is concerned that the proposed pension reform will bring about grave injustice for ordinary citizens. The difference between Singapore and France represents the numerous policy options and alternatives that can be considered as we evolve. But changes to our system will never come if we stick with a dogmatic ideological govt with a single KPI of economic growth and puts zero weight on the ideals of our pledge which contains the words "justice and equality".
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France launches bill to raise retirement age [Link]

PARIS (AFP) - – The French government was Tuesday to officially launch plans to raise the retirement age from 60 to 62, in a sweeping overhaul of the pensions system that labour unions have vowed to fight.

The plan is a centrepiece of President Nicolas Sarkozy's reform agenda as he eyes a reelection bid in 2012, but it has been overshadowed by a huge political funding scandal that hit his Labour Minister Eric Woerth.

Under the plan, French workers will have to pay contributions for a longer period and some new taxes will be imposed on high-income earners and on capital gains to help plug a gaping hole in pensions funding.

The most controversial parts of the plan will be pushing back the minimum retirement age from 60 to 62 by 2018 and bringing pub sector pension plans in line with those in the private sector.

Talk of raising the retirement age has been taboo in France, where the right to stop working from age 60 has been enshrined since 1982, one of the main legacies of Socialist president Francois Mitterrand.

Sarkozy said Monday he was ready to discuss some of the measures in the bill with the trade unions, but that the 62-year target and the extension of public sector employee contributions would stay.

"I'm telling you: 62 years, that we won't touch," he said in a major television interview called in an attempt to move beyond the Woerth scandal.

"I'm telling you: The equality if public and private contributions, that's a question of justice. On the rest, we'll be open to hear what our negotiating partners say," he declared.

The plan prompted mass street protests last month and labour unions have vowed further action when parliament debates it in September.

"I'm expecting demonstrations. I know that people are suffering. What will make a difference will be our idea of what is just. Not the size of the protests" - Sarkozy said.

Woerth's presentation of the bill at Tuesday's cabinet meeting comes at an especially delicate time, after a scandal linked to the fortune of France's richest woman, Liliane Bettencourt.

A government report cleared Woerth of accusations that he helped Bettencourt evade taxes, but other probes into her affairs are pending and he has also been accused of illegal campaign funding and conflicts of interest.

On Tuesday he is to formally present his pensions bill to the government, which is expected to approve it and pass it on to parliament to debate in September. Sarkozy predicted it would be voted into law shortly thereafter.

The reform is aimed at helping the government meet its announced deficit target of three percent of GDP in 2013. Woerth says it aims to balance the books and achieve "zero-deficit" in its pensions scheme by 2018.

France's biggest union, the CGT, has told the government to go back to the drawing board and come up with another plan, calling it a "flagrant injustice" that puts the burden of reform on workers.

Jean-Claude Mailly, leader of the Force Ouvriere union, has branded the draft legislation "socially unjust and economically inefficient".

Like many other European countries, France is facing a funding shortfall in its pensions plan due to a growing older population and fewer working-age people paying contributions.

The deficit is on track to reach 45 billion euros in 2020 and could reach between 72 and 115 billion euros by 2050, according to France's COR pensions advisory council.

French workers on average retire at a younger age than most of their counterparts in Europe and the proposed changes will still leave them with one of the lowest retirement ages on the continent.

18 comments:

runroad said...

"I'm not expecting demonstrations. I know that people are suffering. What can these lower forms of life do? I have them by the balls and their hearts and minds must follow. What will make a difference will be MY idea of what is just. Not the size of the protests. Because there will be none. My Secret Police and kangaroo courts will ensure that." - Lee Kuan Yew said.

Anonymous said...

As long as majority have money or have money to retire, it is not an issue. PAP govt will continue to ensure that, otherwise they may lose in the elections. They are doing a good job so far because they did not lost any elections.

Anonymous said...

PAP's ideology is fascism. Period.

Anonymous said...

fortunately most europeans still dont listen to their politicians. But at least they can make them laugh.

Anonymous said...

our situation is different. go ask some of these old folks why they are still working beyond the retirement age and they will give you the answer.

that's our problem, they want to work.

it is one of those issues that's more complex than putting all the blame on a chicken crossing the road and the pig driving the truck about to hit the chicken on the road.

Anonymous said...

i did ask a 60-ish hawker in a foodcourt a few days before last GE whether she was an employee or actually owned the stall.

she said she cldn't even apply for a hawker's permit because she din have the money to put down as deposit for utilities.

i guess that also meant she had no money to retire.

i expect to see a sea of change at the next ge - people can be stupid forever.

Anonymous said...

In France, retirement means enjoying life: drinking coffee, playing gateball with neighbours, sampling wines, simple farming etc.

In Singapore, retirement means watching stupid Mediacorp TV programs whole day in the stuffy HDB flat; or staring at your neighbours who may not speak your language in the HDB void decks; or drinking coffee with lousy taste in the steamy coffee shop.

So of course Singaporeans want to work until they die, as there is nothing to look forward to in life.

Anonymous said...

Precisely, lol

tauhuayboy said...

At least the French can and will protest. What do Singaporeans do? They just accept it.

Anonymous said...

So long as your psyche is driven by what things should be (i.e. ideals) you will be in a continual state of flux / anger.

Once your psyche is driven by what things are (i.e. reality), you will be able to change the changeable and accept the inevitable.

The inevitable becomes changeable once every 4 years. You will have an opportunity to decide on the type future that you want for you and your children. Till then, it is rather pointless to vent and fume.

Anonymous said...

yes,every 4 to 5 years, an opportunity will open up for the jackpot.

once you hit the jackpot, that's the greatest change$$$ we will ever see. haaa

runroad said...

"The inevitable becomes changeable once every 4 years. You will have an opportunity to decide on the type future that you want for you and your children. Till then, it is rather pointless to vent and fume."

No. I f only that glib-tongued assertion were true there would be little need for this blog. Singaporeans can no longer easily change their rulers any more, if at all. Lee senior has seen to that with great cunning and not a little luck. You have been surgically shorn of your human rights and your choices have been reduced to (1) kowtow and accept the crumbs gratefully or (2) get out.

In this 700 sq. km city-state, you do not even have the option of escaping into the rural landscape so in that sense the serfs of Burma and China have it slightly better under their despots than you do under yours. Not even the parks and seashore of your own country are yours to sleep on without a licence. You are now kept like pigs in a sty being fattened up for the big feast every 4 years.

And you need to vent and fume. To keep the injustices bottled up inside will either turn you into yet another statistic for the nation's #1 killer disease or a smear on the MRT tracks. Remember that unlike certain Ministers of the Meritocratic Republic of Singapore, you will likely not be able to afford the cost of triple bypass surgery.

Anonymous said...

There is no comparison between the French State Pension and the non-existent pension system in Singapore. In France if u don't have sufficient private pension, u can collect a government pension. In Singapore if u have insufficient private pension, u have to rely on your relatives for charity.

Anonymous said...

thats y u get 80yo uncles n aunties working as cleaners in Singapore.

No prizes for guessing who benefits the most from the current CPF system - where else can Temasek and GIC get their dirt cheap secured funding from and splurge them on so many failed investments??

Anonymous said...

80 yrs old thankful still can work and feel useful as hygiene officer
dun look down on old unkles auntees ok
somemore, work clean aircon office cool cool

no country for poor man said...

The government just announced that GDP growth for the year is expected to be between 13% - 15%. Let's see if this translate to better living condition for all of us or just another big pay rise for the ministers.

Reena said...
This comment has been removed by the author.
Reena said...

The Singaporean system is not good. I hate seeing old people cleaning in food courts or collecting cans everywhere they go. It's shameful. As an Asian country I thought elders where more respected but it seems Singapore has sold these values.

In Spain they want to raise the retirement age from "65" (everybody retires before) to 67. We also get government pension but I'm sure you've heard about the massive problems Europe is having to maintain this system. The only solution is to pay your own pension plan, so when you retire you get two different pensions. This also creates a gap among people but what can you do?

And the medical system in Europe (Spain and the UK, at least) is miles ahead from Singapore's. I'm sorry but I believe healthcare shouldn't be a business and people should pay as less as possible for treatment.

People should demonstrate for all these things, but instead what do they do? they complain because they have to pay extra to watch the World Cup. Genius.