The pension problems in Western Europe are well known. Expensive as they are, there soon will not be enough workers to contribute for ever older pensioners. The régimes spéciaux de retraite (special pension schemes) are no exception. On the contrary, they are probably the best example of these problems. Costing around 6bn euros a year, the government insists that the state cannot keep up with these generous handouts.

The case for reforming pensions still encounters much resistance. In France, the government went forward with its reform plan of the régimes spéciaux and two massive strikes followed suit. Trying to leave political strategies aside the debate on the actual utility of the reforms is fascinating.

The regimes spéciaux are special pension schemes dating for the most part from the 19th century ^[1]. About 1,6 million people are directly concerned with it, out of which there are 0,5 million contributors and 1,1 million pensioners. The biggest group of people concerned – employees of national railways, Paris transports and from state-owned EDF-GDF personnel – are leading the contestations.

According to the government, these regimes must be reformed in order to be integrated with the general regime which applies to all the rest of French pensioners ^[2].  One must, however, dig deeper and question the reasons why we reform in the first place.

The most obvious answer is also simple: reforms are done in order to achieve a higher level of living standards. Higher living standards, as provided by reforms take many shapes: enhanced (economic) efficiency, poverty relief, social insurance, income smoothing, reduced inequality, stronger social integration (fostering social solidarity), and so forth. It is against these objectives that the current proposal for pension reforms should be confronted.

As previously implied, the present reform of the regimes spéciaux is thought to achieve two main points: sustainable financing for future pensions and furthering social solidarity.   As far as sustainable financing of pensions, the verdict is quite clear: everyone agrees, including the trade unions that called for the strikes.  The issue is more about social solidarity.

Many French see in this reform a dismantlement of what was gained in sweat and blood over years of social struggle. The concept of acquis sociaux is fundamental in French labour law. Once acquired, social perks are next to impossible to remove. If they were not, it would be an open door for downsizing social gains and exploitation by employers. This latter argument is very important to keep in mind, since no reform should draw workers back.

Yet using this argument to keep special perks given 50 years ago might not seem fair today. Social solidarity and equality means that no matter if working in the private or public sector, people should have similar old-age insurance. All of us pay taxes; all of us should have the same rights. Unemployment insurance works that way, then why not pensions? In essence, this amounts to saying that increasing contributions from 37,5 to 40 years (since reducing it is not an option due to financing) is fairer for the whole of society. It is unpleasant, but fairer.

This is, however, a twist to that: the so-called pénibilité du travail (job hardship). An SNCF (French railways) worker driving trains all night long, or a railtrack repairman working in the cold nights of December, have jobs which entail hardship and sacrifices. Since these public sector employees sometimes work in difficult conditions, they must be somehow compensated (through early retirement for instance).

Bu what about the street cleaner employed by a private company, who is up and running every day by 6 am, doing an extremely tedious job; one of general interest (and probably for much less money that train drivers). Fifty years ago, no private company was in charge of street cleaning. Now things have changed. So why would he not enjoy the benefits that the train driver enjoys? Is the fact that he is employed by a private firm rather than the state sufficient to argue this? It appears not.

The private/public divide does not hold, and does not constitute a valid argument against the reform. That being said, aligning the régimes spéciaux to the general regime does not imply that those who have métiers de grande pénibilité cannot be compensated for it. On the contrary, reform should be done and take job hardship into account and this should be re-enforced in the private sector as well.  Social solidarity is a dynamic concept which should not differentiate private from public when it comes to social issues. It is on other grounds that the differentiation should be made. French society has changed and, like the rest of Western Europe, it has opened up to private interests; for good or for bad, it is a fact. 

Social solidarity is also an inter-generational concept. Not reforming would be unfair to future generations as they would bear the burden especially given the 'pay as you go' system.  Fifty years ago, a man would live about 65 years; in 2006, about 80 years. Assuming the retirement age has not been changed since the 50s, pensions should now cover up 15 more years of life and should also account for a rising population of pensioners. Given this scenario, there are only a few options: diminish pensions, rise contributions, and/or rise retirement age. The debate on the best method is a technical matter, not an ideological one. What is most important is that whatever the method chosen, with respect to the acquis sociaux should be crucial: the point is not to erase them, but rather to bring them closer to today's realities.  Reforming the régimes spéciaux is essential, and still it will not be enough,

 [1]   The oldest regime special dates from 1698. It was created by Louis XIV for the employees of the Paris Opera.

 [2]   "L'objectif de la réforme vise à harmoniser, pour le présent et pour l'avenir, les principaux paramètres avec ceux applicables au régime de retraite de la fonction publique", Document d'orientation relatif à la réforme des régimes spéciaux de retraite, Ministère du travail, des relations sociales et de la solidarité, Paris le 10 Octobre 2007.

* Yannis Arvanitis (UWCAd 99-01) works at the European Bank for Reconstruction and Development.  He holds an MSc in European Political Economy from the London School of Economics and Political Sciences and a Master in International Affairs with a specialisation in Development Policies from Sciences-Po, Paris.