Pensions: pensions will be frozen again in 2016

VIDEO – The Secretary of State for the Budget announces that pensions will not be revalued this year due to low inflation, after two years of (quasi) freeze.

Still missed! It will not be this time that retirees will get a helping hand from the government. Their pensions will not be increased this Saturday, October 1, the traditional date of their revaluation. The announcement was made on Thursday by Secretary of State for Budget Christian Eckert. “Pensions are indexed to inflation. Today inflation is low or even zero. So revaluing pensions would be an extraordinarily large expense. There is no provision for revaluation, ”he said on LCI. This decision was then confirmed by the cabinet of Marisol Touraine to the unions. “The Minister will reflect on how to develop the indexation system,” said Didier Hotte of Force Ouvrière. She is aware that the system condemns retirees to see their pensions plummet. She is ready to make an effort ”. In order to denounce the freezing of pensions, nine trade union organizations are demonstrating this afternoon in the streets of the capital, from Montparnasse to the Ministry of Social Affairs.

For the third year in a row, pensions will therefore continue to (almost) stagnate in 2017. In 2014, there was no adjustment and in 2015, pensions had increased by 0.1%. According to the Directorate of Research, Studies, Evaluation and Statistics, nearly 5% of French retirees earn less than 1000 euros per month, the threshold below which an individual is considered poor.

A helping hand for 2017?

Since the Balladur reform of 1993, the indexation of pensions depends on the rate of inflation recorded over the last twelve months. However, between August 2015 and July 2016, this rate is currently estimated at 0%. “Since the indexation on prices, the gap with wages is accentuated, from 1.4% to 1.8% per year, on the backs of retirees who suffer a drop in their standard of living and impoverishment for all ”, denounce the nine unions. This is why the latter are calling for the return of the indexation of pensions to wages. Last July, in order to reduce the system’s sensitivity to variations in growth and thus cushion the financial shock in the event of a downturn.

After three years of (quasi) freezing of pensions, retirees could however find a little smile in 2017. In its report published last week, the Social Security Accounts Commission has indeed forecast an increase in pensions of 0, 6%… if inflation is back by then! A small consolation compared to the increases recorded over the past ten years: only one was less than 1%. It was in 2010 in the midst of the Greek crisis!