MPutting a pension reform at the top of the agenda in 2023 is inappropriate: the pension system will have a surplus of 3 billion euros in 2022, its evolution is controlled. Nothing justifies it, if not a political objective: to show Emmanuel Macron’s ability to reduce social spending. Questions such as the state of public services, reindustrialization and the ecological transition are more crucial.
The French pension system is currently satisfactory. Retirees enjoy a standard of living equivalent to that of working people. The poverty rate for the elderly is significantly lower than that of the general population. The rate of replacement of salary by retirement is higher for low than for high salaries, around 85% against 60%. The age opening the right to a full pension is legitimately higher for those who started working later, which partly compensates for the differences in life expectancy.
So far, despite past reforms, the relative standard of living of retirees has been preserved on average, with more and more women having completed a full career and being entitled to a satisfactory retirement. However, since 2015, the ratio between pensions and wages has deteriorated and the poverty rate among pensioners has increased. Since 2017, many retirees have suffered a 9.6% drop in their purchasing power, due to the increase in the general social contribution (CSG) and the under-indexation of pensions.
No risk of bankruptcy
The Pensions Orientation Council (COR) engages, each year, in an above-ground exercise, a projection of pensions until 2070, maintaining the current rules, and without taking into account the inflections that the ecological transition will impose. .
As a result of past reforms, the average retirement age would drop from 62.3 years in 2021 to 64 years by 2035, but the ratio of pensioners to working people would increase by 28%. In the central hypothesis (1% increase per year in labor productivity, unemployment rate at 7% of the active population), the share of pensions in gross domestic product (GDP), 13.8% in 2021, would only increase to 14.5% in 2032, before decreasing to 14.1% in 2050.
The projected deficits are the thickness of the line: 0.45% of GDP per year on average over the next twenty-five years, if the State does not reduce its subsidies to pension schemes; 0.15%, if the unemployment rate drops to 4.5%. They could be financed by the reduction of exemptions from social contributions, by the surpluses of Unédic or by the end of the reimbursement of the social debt.
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