Illinois teachers' unions are pushing changes to the state’s pension system this spring

 

Courtney Billittier comes from a long line of educators, including her father who recently retired after 35 years of teaching. But Billittier, who has been teaching for the past 14 years, will have to work longer than her father to earn a smaller pension.

That’s because state lawmakers passed pension reform legislation to deal with a budget crisis in 2010 that created new standards for public sector employees hired at the start of 2011. The result is a two-tiered pension system: Employees hired before 2011 were able to retire as early as age 55 and with more financial perks, while employees hired after that year were eligible to retire at age 67. This is often referred to as Tier 1 and Tier 2 benefits.

Billittier said her father has always encouraged her to have a separate retirement savings account because of the change in state law. “I think it really ingrained in me right away that I should not be banking on the pension at the end of this career being something that I can live off of entirely, and that there has to be some actions that I’m taking on my own,” said Billittier.

Teachers unions, including the Illinois Federation of Teachers and Illinois Education Association, alongside other public sector employee unions are advocating for state lawmakers to make a change to retirement benefits for newer educators. They say it is unfair to current educators who pay the same amount into the pension system but do not receive the same benefits and have to work longer. They also fear that the current system will deter new educators from entering the profession at a time when the state is struggling with a teacher shortage.

But there’s an even bigger issue: The lower tier retirement benefits could soon fall below what is provided by Social Security. In Illinois, public school educators and other public sector employees do not pay into Social Security and are also not eligible to receive those federal benefits when they retire. Still, Illinois must ensure that benefits are at least equal to Social Security.

The Civic Federation, a nonpartisan research organization, said state lawmakers will have to make a change to the tiered retirement benefits soon or the state will risk falling out of compliance with federal laws, known as Safe Harbor — a standard set by the Internal Revenue Service assessing several factors to see if state pension benefits are equivalent to Social Security benefits — which could be costly for Illinois.

Illinois Sen. Robert Martwick, who has proposed legislation in the past and this year to change the teacher retirement benefits system, said it could get expensive for the state, local municipalities, and even school districts if the state’s pension systems do not comply with federal law. Martwick said the lower tier pension benefits could open school districts up to costly lawsuits — if teachers prevailed, settlements could eat into districts’ operating budgets.

“That would sink Illinois overnight,” said Martwick, adding that failing to correct the situation is not an option for the state.

Teachers' unions, state legislators, and finance experts all agree that the lower tier pension benefits need to be addressed. However, they differ in how to fix the problem. Here are five things you should know about Illinois’ two-tier pension benefits and what they mean for educators and classrooms.

Why did Illinois create a second-tier pension benefit?

State pension funds were hit hard by the 2008 financial crisis, often called the Great Recession, since pension systems have investments in the stock market. Public pensions across the nation saw their investments fall in value by $889 billion between 2007 and 2008, according to numbers by the Federal Reserve.

Amanda Kass, assistant professor at DePaul University, said the health of the pension system determines how much money the state and employees must contribute to the system in order for it to have money to pay retirees. When the market crashed, the amount Illinois lawmakers needed to contribute went up significantly. To help offset ballooning pension payments, state lawmakers passed a bill in 2010 that changed retirement benefits for all public sector employees who started working on or after Jan. 1, 2011. They believed the plan would save the state money over time.

Annie Rojas, lead policy analyst at the Center for Tax and Budget Accountability, said the state’s pension problems started before 2010. She pointed to policy changes in 1995 under Republican Gov. Jim Edgar when the state created a pension ramp, known as the Edgar Ramp, that would require the state to get pension funds to 90% funded by 2045. This ramp set the state’s pension contributions very low at the beginning of the 50-year plan, leading to higher pension costs later on.

According to Crain’s Chicago Business in 2010, the state was not contributing enough funding to the pension system even before Edgar’s Ramp was created. Since the 1980s, lawmakers have cut funding to pensions to deal with budget shortfalls. Pension payments make up almost 20% of the state’s proposed budget for fiscal year 2026. The Teachers Retirement System’s funded ratio is at 45.8% as of fiscal year 2024.

What do Tier 2 pension benefits mean for educators?

All pension funds in Illinois have two tiers now. This includes the Teacher Retirement System, which covers all teachers in the 800-plus school districts outside of Chicago, and the Chicago Teachers Pension Fund.

Al Llorens, president of the Illinois Education Association, said a key difference between the two tiers is that teachers in the second tier must work until age 67. For educators who might have started as a teacher right out of college at the age of 22, they will have to work about 45 years. However, teachers in the first tier could receive retirement benefits at age 55, having worked for roughly 33 years.

Once teachers in Tier 2 retire, their pensionable salary is capped and calculated differently than Tier 1 teachers. That calculation takes their highest salary of eight years in the 10 years before retiring, rather than four of the last 10 years, which results in a lower final average salary, according to the Civic Federation.

Regardless of the difference in benefits between the two tiers, all teachers pay the same amount into the pension system, which Llorens said is leading teachers to leave the profession.

“If you’re paying a lot more than what your pension is returning, that’s not an incentive to stay either,” said Llorens. “We do have to deal with something that not only allows us to attract but to retain teachers, because we’re in the middle of a shortage that doesn’t seem to be going away anytime soon.“

Could smaller retirement benefits steer people away from the profession?

It’s unclear whether smaller retirement benefits are steering people away from the teaching profession in Illinois. However, finance experts, educators, and teachers' union leaders believe it could be an issue for hiring and retaining educators.

Tom Moore, a science teacher at Hoffman Estate High School at Township School District 211, who is in Tier 2, said he thinks it could be hard to retain some educators who might not have realized they were going to have to work longer than some of their colleagues.

“I’m 13 years in now, and I still have 35 more years to go,” said Moore. “At this point, if I was Tier 1, I would already be a third away or almost half the way through my professional career.”

Hiring and retaining teachers are a major concern for local school districts, especially since the state is dealing with a teacher shortage. 

A joint report from the Illinois Association of Regional Superintendents of Schools and the Illinois State Board of Education found that the shortage of teachers is easing across the state, but it has been difficult for districts to fill certain teacher positions, such as roles in special education and bilingual education.

When education leaders were asked about the top three issues leading to teacher shortages, 143 of the 694 leaders who responded said it was due to difficulty hiring and retaining teachers, according to the report.

“While the pay during their career may not be great there was always a good retirement to work towards,” said a quote in the report. “Now they don’t have either.”

Can the state undo its two-tiered pension system?

The short answer is probably not. It would be expensive for the state to put all of its teachers and other public sector employees into Tier 1. Pension costs for the state are already high: In fiscal year 2025, pensions accounted for roughly 19% of the state’s overall operating budget. 

According to a report by the University of Illinois’ Institute of Government and Public Affairs, it would cost the state almost $30 billion by fiscal year 2045 to match Tier 2 retirement benefits to Tier 1. This would require the state to add $1.3 billion dollars to pensions by the end of 2027.

Annie McGowan from Civic Federation said the state does not “have the revenue stream” to make larger payments to the pension system. Especially at a time when there are other pressures on state funding.

Illinois’ pension system also could be affected by the dramatic decline in the stock market that has followed President Donald Trump announcing tariffs, or taxes on goods from other countries, last week. The last time the market took such a hit was at the beginning of the COVID pandemic in 2020.

What are the proposals to change Tier 2?

State lawmakers, teachers' unions, finance and budget officials, and even Gov. J.B. Pritzker have different ideas for how to improve the teacher pension system. But they all agree that the main constraint is cost.

The Civic Federation called on the state in a report from 2023 to comply with federal laws and ensure the second tier remains equal to or better than Social Security benefits. Rojas, from the Center for Tax and Budget Accountability, said compliance with federal law isn’t enough when the difference in pension benefits between tiers is inequitable for workers.

The Illinois Educators Association would like to see the retirement age for Tier 2 workers reduced from 67 to 60 years old — still more than workers in the first tier — and an increase in retirement benefits, said Llorens.

State lawmakers filed House Bill 2711 and Senate Bill 2 to change part of Tier 2 in this spring’s legislative session. Martwick said his proposal in the Senate will ensure that the state is in compliance with federal law and will make some changes requested by state employee unions. However, he said the bill is likely to change before being voted on since there are ongoing negotiations around how to address the lesser tier pension benefits.

Last year, Pritzker announced proposals to fix the state’s pension crisis. Among his plans were to increase the funding goal to 100%, more than the 90% approved in the 1990s, to ensure pensions are fully funded. Since moving the funding target would increase state pension contributions, Pritzker proposed moving the target year to 2048, instead of 2045.

Also, Pritzker wants to change the state’s pensionable wage cap to match Social Security to comply with federal law. To achieve this part of the plan, Pritzker proposed an additional $78 million in the fiscal year 2026 budget on top of the state’s required contributions.

Samantha Smylie is the state education reporter for Chalkbeat Chicago covering school districts across the state, legislation, special education and the state board of education. Contact Samantha at ssmylie@chalkbeat.org.

The TRS Tier-Two Pension Plan (Posted on my blog May 11, 2011):

SB 1946 passed on March 24, 2010, in approximately 10 hours (There was no public policy for this legislature); it was signed into law on April 14, 2010. It began January 2011. 

Note: Tier II members are subsidizing both Tier I and Tier II benefits. In the future, when Tier II members are the significant majority in TRS, the subsidy they pay will cause a reduction in the state's annual contribution. Eventually, the state will not owe any annual contribution to TRS because the members will be paying the entire cost. Furthermore, these teachers will receive a TRS pension that will be less than Social Security, and school districts will be responsible for making up the difference. 

Special note: teachers do not receive Social Security; the State of Illinois saves billions of dollars by not having to pay into Social Security. 

Boeing Workers Nix Tentative Contract, Demand Pension Restoration

 

American workers are increasingly demanding that their employers restore their traditional defined benefit pension plans and are making the issue a principal ask in collective bargaining negotiations.

The latest example of how highly workers value pensions was the overwhelming (64%) rejection by rank-and-file members of the International Association of Machinists and Aerospace Workers (IAM) in Seattle, WA, of a tentative bargaining agreement negotiated by their union with Boeing.

In turning down an agreement that included increased wages and increased employer contributions to their 401(k), the Washington Post reported that “some workers said they were voting to reject the deal because the wage gains fell short. Many were also hoping for the restoration of a pension program.”

“The fact that IAM members are continuing to demand a defined benefit plan shows that they recognize the inherent inadequacies of 401(k) plans that have failed millions of people. Pension plans provide reliable guaranteed lifetime benefits, while 401(k)s put all the risks and responsibilities on to individuals. So it makes sense that they’re advocating for better benefits,” said Pension Rights Center Executive Director Karen Friedman.

Having a secure retirement is part of the American dream and now unions are leading the way in stimulating a debate on this issue. “Fighting for defined benefit plans is not just important in collective bargaining, but also represents a paramount goal for the country. Everyone needs a secure, adequate lifetime retirement income and this needs to be a priority for Congress,” Friedman added.

by David Brandolph, Pension Rights Center

Boeing Workers Nix Tentative Contract, Demand Pension Restoration

 

Uptick in Withdrawals Exposes the Inadequacy of Do-It-Yourself Retirement

 

For decades, employers have been steadily ridding themselves of the responsibility of funding and making payments to traditional defined benefit pensions in favor of 401(k)-type defined contribution plans. But are these individual account retirement savings plans providing sufficient retirement income for most Americans?

For millions of workers, that answer is “No.”

A survey of individuals in the 2020 U.S. Census showed just how deficient these plans are. Only a little more than one-third of workers (34.6%) participated in a defined contribution plan and the median account value of these retirement plans was a woefully inadequate $30,000. Only 13.5% of workers participated in a defined benefit plan that provides a guaranteed retirement income.

The data isn’t much better when total household savings are considered. In the Federal Reserve’s Survey of Consumer Finances for 2019-2022 (a measure of household savings), the median account balance was $87,000 for all households and $185,000 for households with workers nearing retirement (ages 55-64). In the household survey, only 54% of workers said they had a retirement account.

According to a recent report from the National Institute on Retirement Security (NIRS), the generation that will begin to retire in the coming decade is significantly unprepared for retirement. NIRS found that Generation X (generally those born between 1965 and 1980) has a median retirement savings account balance of a paltry $40,000.

Even when people save money in their plans, they often don’t keep it there. For example, a new Bank of America surveyshows that of the 4 million participants who have accounts in the plans that BofA serves as recordkeeper, the number of participants taking a plan loan rose to about 75,000 (2.5%) participants in the second quarter of 2023, compared to about 56,000 (1.9%) participants in the previous quarter. The average plan loan balance was $8,550, BofA found.

Several other recent surveys have shown a similar trend of increasing hardship withdrawals. A survey by Fidelity revealed that the share of plan participants withdrawing money from their plan more than tripled between 2018 and 2023, rising from 2.1% to 6.9%. Another survey from Vanguard reported that hardship withdrawals doubled in a four-year span, climbing from a monthly rate of 2.1 transactions per 1,000 participants in 2018 to a rate of 4.3 transactions in 2022.

Participants who withdraw plan funds to cover non-retirement expenses, no matter how justified, are shortchanging their future. Every dollar withdrawn will no longer be in the account where it can grow tax deferred. That lost principle, combined with the loss of potential interest and investment gains over what could be years or decades, won’t be there for them when they need it in retirement. Some who withdraw assets could see their account balances reduced by thousands of dollars, tens of thousands or even more.

Even if a participant eventually repays plan loans to his or her account, the result is usually a significant reduction in their ultimate retirement account balance compared to what they would have had if the money had remained in the plan all along.

The American retirement nest-egg has been traditionally thought to rely on a three-legged stool, consisting of Social Security payments, personal savings and pension income. With employers increasingly terminating the defined benefit pension plans they have been offering their workers and replacing those vehicles with deficient and inadequate defined contribution savings plans, many workers, particularly those with inadequate incomes, will discover on reaching retirement that at least one leg of the stool has been partially, or even wholly, sawed off.

-Pension Rights Center

 by David Brandolph

Traditional pension plans are pretty rare; however, here’s who still has them and how they work/ Illinois TRS

CNN — The phrase “pension benefits” may come up a lot in the next several days as negotiations between the United Auto Workers union and the Big Three automakers go down to the wire to avert a strike. But for most private-sector US workers, pensions disappeared long ago.

In a traditional pension, employers contribute, invest and manage retirement funds for their workers, who then receive guaranteed monthly checks for life after they retire. But over the past several decades, employers have either closed or frozen their pensions and turned instead to retirement savings vehicles like the 401(k), which put much more of the onus on workers to save, invest and manage their own money for retirement.

“We’ve shifted from a more paternalistic system to a do-it-yourself savings plan,” said Karen Friedman, executive director of the Pension Rights Center.

That’s not to say traditional pensions — also known as defined benefit (DB) plans — are completely dead, at least not when you look at the broad landscape of all US workers. But access to these benefits has dropped steeply and they are not likely to make a comeback.

Who has a pension in 2023

The workers most likely to still have a DB plan are unionized workers in both the public sector (think federal, state and local government workers and teachers) and the private sector (e.g., autoworkers), as well as active-duty military members with at least 20 years of service.

Those least likely to have a defined benefit pension are non-unionized private-sector workers, which is to say most employed adults. In March 2022, for instance, only 7% of private industry nonunion employees were participating in defined benefit plans, according to the Bureau of Labor Statistics. By contrast, a majority of union workers in both the private and public sectors were active participants in one.

But not all unionized workers have equal access to their employer’s DB plan. One sticking point in the UAW negotiations is to restore access to company pension plans that had been closed to anyone hired after the union accepted deep concessions in its 2007 contract. That was back when General Motors and Chrysler were less than two years away from bankruptcy and federal bailouts.

To get a broad sense of how drastically the retirement savings landscape has changed, consider that there were 27.2 million active participants in private-sector DB plans in 1975, according to the Congressional Research Service, which relied on BLS data. By 2020, that number had dropped to 12 million. Meanwhile, the number of active participants in private-sector defined contribution (DC) plans like a 401(k) or profit-sharing plan soared from 11.2 million in 1975 to 85.3 million in 2020.

Key differences between a traditional pension and a 401(k)

With defined benefit pensions, the entire burden of saving and investing money for a worker’s retirement falls on the employer, although some DB plans now require employees to contribute some money as well.

And how much a person is paid every month in retirement from their pension is determined by a complicated formula usually based on salary and years of service.

A DC plan (such as a 401(k) or a profit-sharing plan) generally puts the burden of saving and investing on the employee, and the employer decides whether and how much to contribute to a worker’s account. That said, the vast majority of companies do offer matching contributions up to a certain percentage of an employee’s salary.

Then, once retired, those in DC plans have to decide how to invest their money and determine annually how much they can withdraw to ensure they don’t run out of money. They may also weigh whether it makes financial sense to buy an expensive annuity with some or all of their savings in order to get a guaranteed paycheck every month.

Why employers moved away from traditional pensions

Many employers started making the shift to 401(k) plans and other DC plans in the 1980s. One reason was cost: Committing to pay employees for the rest of their lives can be expensive and unpredictable.

“Cost played an important role, but cost certainty was also important. Under the DB plans, the costs necessary to fund the plan could change every year depending on rates of return in the markets and growing expected longevity,” said Craig Copeland, director of wealth benefits research at the Employee Benefit Research Institute. “Some years, no contributions would be necessary, whereas the next year they could be substantial.”

By contrast, he noted, DC plan costs are more predictable. “They have contributions and plan administration fees paid each year, but market changes [don’t] change what the company [is] required to pay.” Plus, Copeland added, employers have more flexibility in how much they pay into worker’s accounts based on company profits.

Lastly, employees can take whatever money they have in their account when they change jobs — including the matching employer contributions that have vested. By contrast, if they cut their tenure short at a job with a DB plan, they risk being left with nothing if they haven’t reached the full vesting time of service required, Copeland said. Still, for workers, he added, “the movement to DC plans increased the complexity of funding retirement.”

No plan is without risk

Defined benefit and defined contribution plans carry different risks for participants.

With traditional pensions, workers won’t get much for their service in retirement unless they stay with the same employer for a very long time. And even if they do, they may not get much out of the plan if they die soon after retiring, because not all plans let workers leave their pension to their families.

And should their employer decide to “de-risk” and sell their DB plan assets and liabilities to an insurance company, workers will still get their pension payments but those payments no longer enjoy the same federal protections, such as shielding them from creditors in the event a retiree runs into financial trouble, Friedman noted.

And should the insurer go bankrupt, the plan won’t be backed by the federal Pension Benefit Guaranty Corp. The PBGC protects pension benefits and continues to pay retirees should their employer or its DB plan become insolvent. But if a plan is sold to an insurer, that protection is lost. Instead, state law will govern how retirees are treated.

The risks for employees in a defined contribution plan, meanwhile, are many. Workers may not save enough and so may be forced to live solely off their Social Security benefits, which are only intended to replace a portion of one’s pre-retirement income. They may not invest their money well or the markets may fall at just the wrong time — especially within five years of one’s retirement — thereby significantly reducing their nest egg. And if they take too much out of their accounts in retirement they risk running out of money before they die.

Retirement readiness at risk for millions

Simply having access to a workplace retirement plan isn’t enough to guarantee a secure retirement. Many workers may have access to a 401(k) plan but don’t make enough money to feel they can afford to contribute much — if anything.

A recent 401(k) report from Vanguard found that the median income of people with access to a plan but who did not participate was just $42,000, meaning half of nonparticipants made less than that.

“401(k)s aren’t really cutting it for most Americans,” said Friedman, who noted that the Pension Rights Center advocates for creating workplace retirement plans that combine the best of DB and DC plan features.

Meanwhile, another group of workers who may find themselves hard up in their older years are the roughly 30% of private-sector workers who don’t have access to either a DB or DC plan at work.

With the exception of some state-run savings programs intended to help them, these employees are on their own to cobble together funds to augment their Social Security benefits, with no help from their employers.

— Jeanne Sahadi, CNN’s Chris Isidore contributed to this report.

Commentary

THIRD STRAIGHT YEAR TRS FINANCES IMPROVED; STATE FY25 CONTRIBUTION TO INCREASE BY 2.7%

Published date: Friday, October 27, 2023

SPRINGFIELD, IL – For the third straight year, the long-term funded ratio of Teachers’ Retirement System has improved, reaching 44.8% at the end of fiscal year 2023. That is a positive increase of 1% over the previous year’s funded status of 43.8%.

The TRS Board of Trustees gave preliminary approval to a $6.20 billion state government contribution for the System in fiscal year 2025. That is a 2.7% increase over the state’s $6.04 billion contribution for the current fiscal year.

“We have made significant progress over the past four years to improve our funded ratio,” said Stan Rupnik, executive director and chief investment officer of TRS. “In each of the past three years, the Governor and Illinois General Assembly have made contributions to the System in excess of the statutory minimum funding. Their commitment to funding, combined with our positive, long-term investment returns, has led to this increase.”

The total TRS unfunded actuarial liability at the end of fiscal year 2023 was $81.9 billion; a 1.5% increase over the $80.6 billion unfunded liability recorded in fiscal year 2022, according to the System’s annual actuarial valuation, compiled by Segal Consultants, of Chicago.

In the last decade, the TRS funded ratio averaged 41.6%. Projections by Segal show slow but steady improvements in the funded ratio between fiscal year 2023 and fiscal year 2045, when state law requires TRS to have a funded ratio of 90%. The funded ratio has seen the most significant improvement since fiscal year 2020, from 40.5% to 44.8% in fiscal year 2023.

ABOUT TEACHERS’ RETIREMENT SYSTEM

The Teachers’ Retirement System of the State of Illinois is the 42nd largest pension system in the United States, and provides retirement, disability and survivor benefits to teachers, administrators and other public-school personnel employed outside of Chicago. The System serves over 448,000 members and had assets of $66 billion as of Sept. 30, 2023.

Commentary

Defined-Contribution Savings Plan v. Defined-Benefit Plan

With a few exceptions, Defined-Contribution Savings Plans were not initially created as retirement vehicles but rather as supplementary savings accounts.

--With a Defined-Contribution Savings Plan (401k, 403b, 457), only your contributions are defined

--A Defined-Contribution Savings Plan shifts all the responsibilities and all the risk from the employer to the employee; thus, your benefit is not guaranteed

--Your benefit is based upon investment earnings

--A Defined-Contribution Savings Plan does not have the “pooled investments, professional money managers, and shared administrative costs” that a Defined-Benefit Plan provides

--Your benefit ends when your account is exhausted

--There are no survivor or disability guarantees

--This plan does allow for portable assets

--Changeover costs to this plan would be significant

--Investment fees are paid by member

--On-going costs would be higher to switch from defined-benefit to defined-contribution:

--The State of Illinois will not “save money.”  Most of the State’s obligation to TRS is for contributions not paid during the past several decades; therefore, the deferred cost of underfunding cannot be eliminated by switching to a Defined-Contribution Savings Plan

--Shifting to a Defined-Contribution Savings Plan can raise annual costs by making it more difficult for Illinois to pay down existing liabilities. The plan will include fewer employees and fewer contributions going forward

--Even with Defined-Con­tribution Savings Plan option, States and localities are still left to deal with past underfunding

--“In 2011, there was a $6.6 trillion deficit between what 401k account holders should have and what they actually have.”

Defined-Benefit Pension Plans 

--You cannot outlive the benefit

--You are not affected by Market volatility

--Defined-Benefit Pension Plan’s assets are held in trust and managed by professional investors

--Survivor and disability benefits are part of this plan

--This plan encourages a long-term career and stable workforce

--Since most Illinois teachers have not paid into Social Security, it is perhaps their only retirement guarantee

--This plan is the best choice for middle-class retirement

--Teachers with a Defined-Benefit Pension Plan are more likely to be self-sufficient and less likely to need public assistance 

--Your defined-benefit pension plan is associated with far fewer households that experience food privation, shelter adversity and health-care hardship

--Because teachers understand the value of such a plan, they are willing to give up higher wages

--TRS performance is well-diversified; it is in top ¼ of all public funds for many years

--Since 1982 to 2011, the average rate of return has been 9.83 percent

--The costs for this plan are not excessive or expensive: 0.3% of total assets, and these costs are paid for by TRS.

Sources: The Teachers’ Retirement System, the Illinois Federation of Teachers, the National Institute on Retirement Security, Center for Retirement Research at Boston College, National Conference on Public Employee Retirement Systems, and Center on Budget and Policy Priorities    

 -Glen Brown

 

Pension Protests in France

 

French unions have called for a show of force with a final day of strikes and protests in the run-up to a crucial vote on Emmanuel Macron’s fiercely contested pensions overhaul in parliament.

The call for an eighth day of national mobilisation on Wednesday comes as rubbish piles up in Paris and a number of other French cities after continuing strikes by refuse collectors who oppose the bill that will increase the official retirement age from 62 to 64.

 

Record numbers of demonstrators have taken to the streets of France over the past weeks to oppose proposed changes to the pension system, which Macron promised to carry out in his re-election campaign last year.

 

The legislation would not only raise the retirement age but also increase the number of years of contributions needed to claim a full pension.

Opinion polls suggest up to 70% of French people oppose the changes, but a poll by Ifop found 71% are resigned to the bill being passed. The same poll found 56% of those asked considered protesters and strikers were justified in bringing France to a standstill in the run-up to Thursday’s vote.

 

The transport minister, Clément Beaune, said there would be disruption to public transport and flights, but it was unlikely to be a “Black Wednesday”.

“There should not be the same level of disruptions as with previous mobilisations,” Beaune said.

The upper house, the Sénat, approved the bill on Saturday sending it back to the National Assembly. Union leaders and opposition MPs are furious that a 28-member cross-party parliamentary commission that will thrash out a final compromise on the bill will [met] behind closed doors on Wednesday.

 

Mathilde Panot of the radical left La France Insoumise (France Unbowed), which tabled 13,000 amendments to the bill in an attempt to halt it, told the Parliamentary Channel: “It’s interesting that at a time when many aspects of the bill haven’t been discussed that citizens can know what is going on.”

 

About 6,600 tonnes of rubbish was estimated to have built up in Paris on Tuesday as the city’s refuse collectors voted to continue their strike until Monday. The powerful CGT union said in a statement that workers in refuse, water, sewage and sanitation sectors of the City of Paris would be stepping up their action.

If the commission agrees on a final text, the bill will return to the Sénat for approval on Thursday morning before being sent back to the Assemblée nationale for a final vote that afternoon.

Analysts say it is a “high risk” week for Macron, whose credibility depends on the legislation going through but who is facing an additional challenge, as his centrist government failed to win an absolute majority in parliamentary elections last June.

 

This leaves it with the choice of doing deals with MPs from the rightwing Les Républicains, or forcing the bill through using a constitutional tool called the 49:3 – a measure that avoids an Assemblée nationale vote it risks losing.

 

Ministers have said the government would not use the 49:3, widely condemned as undemocratic and which risks inflaming a volatile public mood. Instead, there has been a flurry of negotiations by ministers to guarantee a majority in the lower house.

Union leaders have said using the 49:3 would lead to a hardening of opposition and would escalate strikes.

The pension system is the keystone of France’s social model but is complicated and expensive. Attempts since the 1990s to overhaul it have caused nationwide protests and brought the country to a standstill.  

-The Guardian