Pension reform: towards an overhaul of family rights

The French pension system includes substantial non-contributive elements that link the right to retirement benefits with the presence of children rather than to contributions paid in. These are called family rights, the main purpose of which is to compensate for career hazards created by having children. However, the current arrangements only partially meet this aim, redistributing in favor of men while doing little for mothers who worked part-time. These family rights could be redesigned, by replacing the bonuses for children and increased benefits periods with a subsidy for each child. This note assesses the impact of such reform – either via a payment proportional to pension benefits or a lump sum payment. The choice between these two options depends chiefly on what role we wish the retirement benefits system to play in compensating women for the career risks they face. Finally, it is important to keep in mind the fact that policies that address directly women's career hazards are ultimately more effective than compensating them later through retirement benefits.