You Think Britain Has A Pensions Problem?

While we wrangle with our respective public or private employers about what pensions we might receive in the future, French pensioners are already having payments withheld.

At the end of December, almost 300,000 retired employees of SNCF, the French railway company, discovered that they had only been paid a third of their normal amount. The remainder was due to be paid yesterday.

The rather worrying reason for this, was that Credit Agricole, one of France's top three banks, which has responsibility for passing the necessary cash to the agency that distributes it, refused to do so.

The same situation was narrowly avoided at EdF, GdF and other public utility companies. Government interviention was necessary because the bank concerned was only willing, or able, to come up with two thirds of the necessary funds to make the pension payments.

It seems that the way things work in France is that pension administrators have the money needed to pay pensioners given to them in advance my the banks, who are then reimbursed by the French government. The trouble is that French banks are now so strapped for cash, that they can no longer do this and remain on the right side of "EU regulations".

It should be noted that French pensions are paid quarterly in advance, so the shortfall was significant. A temporary solution has been put in place to cover the next three quarters, but there is nothing certain for the December 2012 payment.