“I would like a ‘retirement-work’ conference”, explains Jean-Pierre Farandou, Minister of Labor, about the discussions to finance the suspension

Appointed Minister of Labor and Solidarity in Sébastien Lecornu’s new government on Sunday, Jean-Pierre Farandou, former CEO of SNCF, finds himself in charge of the explosive pensions issue. While the Prime Minister has just announced the suspension of the criticized reform, which had been carried out by Élisabeth Borne, the minister returns in the “20 Heures” of Tuesday October 14 to this economic and social challenge.

This text corresponds to part of the transcription of the interview above. Click on the video to watch it in full.

Léa Salamé: As minister, you are one of the surprise appointments of this new Lecornu II government. You will have to put in place the suspension of the pension reform announced by Sébastien Lecornu. We’re going to talk about it. But first, this evening, what do you say? We escaped censorship, we saved the government, will we be able to pass the budget?

Jean-Pierre Farandou: I believe that first of all, we must be careful and respect the vote of the deputies, so we will wait wisely for things to be done, deposit of censure on one side, vote on the other, we will wait. Well, we are perhaps a little less tense after both the Prime Minister’s statement and the reactions we have heard, but let’s let things happen peacefully. But you know, I signed up to work. I did not leave the SNCF to abandon the position entrusted to me. With my colleagues, the government, we all decided to work for the French very, very quickly. It’s true, we will have to work on the budget, but through the budget, work for the French. There are very concrete things in the budget. If things go well, if censorship does not work, I can tell you that we are all in the same blocks, we will all start working for the French.

If censorship does not work as you say, you will therefore have to apply the suspension of the pension reform, the end of a totem of Emmanuel Macron’s five-year term. You were not a minister, but it is true that it has been three years since all the ministers took the stage to explain to us that there is no alternative to raising the legal age, that otherwise it would be a catastrophe for our public finances, that the financial markets would penalize us. Is all this no longer true today?

I think we need to make a film again. This reform is necessary. The problem we have with our distribution systems, which we really like, is that the active pay for the retired. The problem is that there are more and more retirees, and so much the better, since the lifespan of the French is increasing and we are all delighted about that, but there are fewer and fewer active people, so we believe that there is a problem. So the simple idea is to say that in this case, we have to work a little more, it’s two years that have been set with all the mechanisms that go with it. That’s reform.

And finally, you give up on it.

Afterwards, I believe the Prime Minister said it, we are not deaf, we are not autistic, we can clearly see that this reform is not going well. There are reactions, there are concerns, there are discontents expressed, we can see it clearly, it is a central subject. Which is not surprising, because pensions are a very important system, it is social, it is social cohesion. So the Prime Minister said it, faced with this situation, he decided today to suspend the cursors, the parameters of the reform, to freeze them. They are now frozen until January 1, 2028.

But where will we find the money to compensate for the loss, the shortfall? Sébastien Lecornu spoke of 400 million euros for this year, 1.8 billion for next year. Where are we going to find the money?

Indeed, you recalled the amounts: 400 million euros from this year, that’s why we have to work within the budget, since if everything goes well and if we are not censored, we will all start working on it. Here too, the Prime Minister said, this is work that will be done with parliamentarians, of course, since there is no 49.3, and there is no majority.

Where do you find the money?

We’ll have to save money, because we’re serious.

Who will save money? Where are you going to make them?

There are almost everywhere, we have to look at it, because at the same time, I believe that the Prime Minister has also been very clear, we are not stopping at the suspension, and secondly, we are not giving up our determined desire to improve our country’s deficit, so from 5.4% to 4.7%, that is the ambition that we have and that we are going to keep.

So concretely, how will it happen? If you are not censored on Thursday, there will immediately be a law which suspends the reform, a law which will be voted on in the National Assembly, to understand the timetable.

The mechanism by which we will put into music the decision taken by the Prime Minister must be done in Parliament, since we are going to modify a law. Only Parliament can modify a law, it must be done quickly, since it will impact the 2026 budget. So that will go quickly.

On December 9, there is a law to suspend pension reform.

Exactly.

3.5 million people are affected. Who, precisely, is affected? What can you say to the French? Who will retire early?

You know, it works by year of birth. We call them cohorts or generations. It’s a bit complicated. These are people who were born in 1964 until 1968. That makes five cohorts. Like there, the parameters are fixed, so we recall the parameters: 62 years and 9 months to retire, and then 170 quarters. There you have it, these two parameters of duration, duration of contribution. These two parameters are frozen until January 1st. So, the people concerned, that’s 3.5 million people, roughly 700,000 people, multiplied by five generations. These are the people who are affected, who, if we had applied the reform, would have had to work much longer. So they will be able to leave earlier with the same pension. This is what your report clearly indicated.

Jean-Pierre Farandou, what was said to Lecornu about the question of arduousness? When are you going to take it over and discuss it? Is this the return of the conclave that Medef did not want? Are you going to take the conclusions of the conclave and have them adopted before Christmas?

No, no, we’re not in the conclave at all. The conclave took place, it is over, it is behind us. It comes down to how we go about it: is there another system? If this one is poorly understood or poorly accepted, is there another? Because the financing equation is still there, it has not disappeared. So, we are going to start discussions. The central idea is to say that retirement is the last stage of work. We also need to talk about work: the work of young people, the work of seniors, working conditions, what makes us happy to work in a company or not? Difficulty is also part of it. So, all these subjects are more or less advanced in discussions with trade unions or employers’ organizations. We must manage the inventory of these subjects and work together.

But when you say a conference on pensions, we agree that it is after Christmas, after the budget vote. The calendar, what will it be?

I have just arrived, I haven’t even served a day as minister, so I started calling the social partners, the employer partners, I’m going to go around to everyone. We will also agree on how we go about it, do we start preparing all of this by the end of the year, since there are already materials that exist, how do we organize ourselves, do we call on experts? It will overflow next year. And I think the right name for this conference, I would like us to talk about a “retirement-work” conference. I absolutely want it. This is perhaps a shortcoming of the previous method which only looked at pensions. The entire work environment is very important to focus on thinking about pensions.

Could we imagine, and this is my last question, bringing back the points pension system in this conference for pensions and work?

We’ll see what the partners bring us.

But what do you think about it?

Me, at this stage, I am very open. Above all, I don’t come in with the solutions, I come in with the problems. I completely take responsibility for the financial issues. In the end, we will have to agree to finance the regime that we have invented. And secondly, the French must adhere to the construction that we will do. We can clearly see that what has been missing is a fairly strong popular support, that the French find the system fair, equitable, while still understanding that the money which finances pensions comes from work. It is workers and growth that will allow us to finance, whatever happens, the future retirement system.

That means we’re going to work more, no matter what.

This is one of the parameters, we know it well. This is, as we well know, this parameter of age. In any case, in a pay-as-you-go system, it is difficult not to work more. From the moment the duration increases… And I say it again, we have more retirees than active people.

Jean-Pierre Farandou, Minister of Labor, formerly SNCF

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