Under the proposal, the legal retirement age will remain 62 but workers who leave at that point will not receive their maximum pension
France's government defied trade unions on Friday by including a contested clause on raising the retirement age by two years in its draft legislation, amid signs that weeks of street protests and strikes may be losing momentum.
President Emmanuel Macron's proposed reform to streamline France's byzantine pension schemes is the biggest overhaul of the system since World War Two and is central to his ambition to make the labour force more flexible and competitive globally.
But it has infuriated trade unions who argue the reform will erode hard-earned benefits and leave pensioners worse off.
The bill, which will be sent to France's pension administrators on Friday for their consideration, says the retirement age for a full pension will be progressively raised to reach 64 "for the 1965 generation who will retire from 2027".
Under the proposal, the legal retirement age will remain 62 but workers who leave at that point will not receive their maximum pension.
"We could not have a text that is silent on the age (for a balanced pension budget)," Laurent Pietraszewski, secretary of state for pensions, told Reuters. "It is at the heart of the reform."
If Macron emerges the winner from the weeks-long showdown, he will have gone further than any other French postwar leader in shaking up the pension system.
However, negotiations continue on Friday between the unions and Prime Minister Edouard Philippe. It is still possible the plans will be watered down as the government seeks to break the deadlock.
Hard-left unions are calling for the government to abandon the bill. The reform-minded CFDT union, France's largest, is open to the planned universal "points" system, but says an increase of the retirement age "crosses a red line".
Unions brought hundreds of thousands of demonstrators onto the streets in cities across France on Thursday but turnout was down on past protests and their momentum is faltering. Participation in strikes now in their 37th day has waned and public support fallen, according to opinion polls.
Philippe has agreed to seek a way of balancing the pension budget other than by raising the retirement age while the bill is being scrutinised in parliament. His government has promised to include any alternative solutions as amendments.
But that has so far been rejected by the unions.
"A compromise will only be found once the sword of Damocles that is the retirement age is no longer hanging over us," Laurent Escure, leader of the UNSA union said after his meeting with Philippe.
Parliament is due to debate the bill from mid-February.