Should we “save” the pension system? The projections are less alarmist

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Supporters of Emmanuel Macron insist that the “pension system” is threatened to justify the outgoing candidate’s provision to postpone the legal starting age to 65. But if the issue of pension financing is a constant problem, these claims clash with medium- and long-term projections.

Mine clearance operation. From the first day of the campaign between the two rounds, traveling to the North, Emmanuel Macron seemed ready to let go of the most commented measure of the electoral program: his retirement at 65.

Worried about “give consent” on a topic it can generate “too much tension”and eager to attract left-wing voters, the outgoing president said he was willing to do so “move” on this reform, evoking a legal age postponed to 64 years and a “review clause” in 2027.

“It’s not giving up or backing down. It’s explaining the reform more clearly and creating a breath of fresh air, a democratic meeting.”however, he specified the day after, April 13 on TF1.

On the merits, there is even less question of retreat as it remains the flagship argument of the presidential camp: a reform would be essential to ensure the sustainability of the pension system.

“We must first save our pension system”Prime Minister Jean Castex assured on Tuesday 12 April on RTL.

“A pension reform is essential to save our pay-as-you-go pension system”the Minister of Economy, Bruno Le Maire, added on 12 April on CNEWS

The argument was also used by government spokesman Gabriel Attal on April 13 on RMC and BFMTV: “We always want to reform our pension system simply so that it can continue to exist and pay pensions!”

Affirmation contested by all the leftist candidates eliminated in the first round of the presidential elections, as well as by Marine Le Pen, and by all the unions. “Retirees are not in a difficult financial situation”assured Laurent Berger, No. 1 in the CFDT, on March 10 at a press conference. “There is no economic reason for a pension reform”also believes François Hommeril, president of the CFE-CGC.

Is the system threatened in its existence? Nothing suggests it, according to the various projection scenarios established by the Pensions Guidance Council (COR).

The work of this body, created in 2000 by then Prime Minister Lionel Jospin, is the main source of public debate on the pension issue.

Attached to the Presidency of the Council, the COR is made up of 41 members: parliamentarians, representatives of professional and trade union organizations, pensioners, families, administration and experts. The next annual report is scheduled for 22 June.

To shed light on the debate, the CoR establishes some long-term projection scenarios based on numerous data: demographics, economic context, evolution of unemployment, evolution of hourly labor productivity. “The results of the projections are broken down according to four scenarios of long-term hourly labor productivity increase (scenario 1%, scenario 1.3%, scenario 1.5% and scenario 1.8%) associated with a stabilized unemployment rate to 7% in 2032 “details in its latest annual report published in June 2021.

However, according to these works, “changes in the share of pension expenditure in GDP would remain on a controlled trajectory over the projection horizon, namely 2070”. While“in 2020, spending on the pension system was 14.7% of GDP”a peak reached in a context of health crisis, “by 2070, the share of pension expenditure in GDP would gradually decrease and would be lower than in 2019 in all scenarios: it would therefore vary between 11.3% and 13% of GDP over the projection horizon”.

How do you explain this long-term picture, despite the aging population? “If the ratios between pension expenditure and GDP decrease in 2070 compared to current levels, whatever the economic scenario envisaged, it is because the unfavorable demographic changes will be offset by the future decline of the average pension compared to the income from activities, with unchanged legislation: the pension it would continue to grow at constant euros, but less quickly than income “explains the COR.

Presenting the pension system in France as being in danger is a “scandalous drama”believes Frédéric Sève, national secretary of the CFDT.


That the system is sustainable does not avoid financing problems. “I say so: today the system is no longer financed”, also repeated Emmanuel Macron on BFMTV on April 11th.

Still opposed to Emmanuel Macron in the second round of presidential elections, Marine Le Pen believes, for her part, that there is no “no argument” finance pensions, as he repeated on 12 April on TF1.

According to COR, “in 2020 the resources of the pension system amounted to 325 billion euros”deposit “339 billion euros paid”. This is an overall loss of just over 13 billion euros (compared to 3.5 billion euros in 2018).

Covid cost the pension system less than expected: previous projections for 2020 included a gap of 25 to 29 billion euros.

In 2021, the forty existing regimes are expected to have a deficit of less than 10 billion euros overall, for approximately 340 billion of cumulative expenditure.

And the return to equilibrium is not expected for more than 15 years, according to the COR projections.

To justify its reform, the executive hammers its triptych: the solution passes either with a fall in pensions, or with an increase in contributions. Two tracks that excludes. It is therefore necessary, consequently, “work more”.

This reform is all the more important in the eyes of the candidate president as it would be necessary “to continue to finance social progress”. is important, otherwise I cannot finance – because it takes seriousness – the social progress I want to make for our retirees, for addiction, for everything that is in my project “he reiterated on April 15 on Franceinfo.

And the president to remember his election promise to raise the minimum retirement for a full career to 1,100 euros. In addition to that, formulated on April 6, four days before the 1st round, to index “from this summer” inflation pensions, instead of waiting for January 1st. This is a 4% increase, justified by the surge in prices linked in particular to the war in Ukraine.

But that’s not all: this reform “there is not just to fill the hole” of the pension system, but also “finance the entire project, with full employment and growth”explained at the beginning of April, during a meeting with the Association of Social Information Journalists (Ajis), Anne de Bayser, coordinator of relations with civil society for candidate Macron.

During this meeting, Pierre Bouillon, head of the ideas center of the presidential party, also proposed the goal of “Freeing up budgetary room for maneuver to finance expenses related to the aging of the population”in terms of both health and addiction (see this AFP article on the Telegram site).

The teams of the president-candidate have estimated the annual margins expected in 2027 at 9 billion euros, thanks to this reform. For its part, the Institut Montaigne, a liberal think tank that considered the programs of all the candidates, is aiming for € 7.7 billion.

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