Tribune. Raising the retirement age to 64 or accelerating the extension of the contribution period would only further aggravate the worrying deterioration of our pension system. The annual report of the Ministry of Labor indeed reveals a very worrying development in the amount of pensions: the gross direct pension of all retirees decreased by 1.1% in constant euros in 2019 compared to 2018. Until 2017, it increased by the the normal game of population renewal: the older generations who die and who had lower pensions give way to new generations who have benefited on average from better careers, and therefore better pensions; it is the “noria effect”.
But this mechanism has become insufficient. The gross pensions of retirees first fell due to a deindexed revaluation of inflation: their purchasing power fell by 1% in 2019. But what is unprecedented is that the average gross pension of people having liquidated their retirement in 2019 has fallen below the average pension of all retirees (€ 1,401 compared to € 1,430)! The average pension of newly retired people has been declining year after year for the past three years. But in 2019, it fell below the level of all retirees. A symbolic milestone has been crossed, which marks the end of a positive development which until then has provided each generation with a better pension than that of the previous one.
The other notable development is the worsening inequality between men and women. The average direct pension for women is, in general, 40% lower than that of men (28% if reversion is included). But because of the better qualifications acquired by women over time, their pensions increased and the gap with men was slowly closing. Successive reforms have slowed down, if not almost stopped, this dynamic: instead of reflecting their best careers, the pensions of women who liquidate their retirement are just stable. Over the past 10 years, the decline in the gender gap is mainly due to the decrease in men’s pensions. It’s equality from below …
Precarious situation
A further extension of the contribution period would increase this reduction in the level of pension for future retirees, and even more so for future retirees. The consequences of the ongoing lengthening of the contribution period – it must reach 43 years for the generation born in 1973 – are already clearly visible: the proportion of retirees who have not succeeded in building up a full career, failing to obtain therefore that an amputated pension, increases over the years. It was 39% of men and 46% of women for the generation born in 1950.
You have 41.49% of this article left to read. The rest is for subscribers only.