Everyone agrees… or almost. Going against general opinion, Emmanuel Macron persists, for the moment, in wanting to maintain the indexation of retirement pensions to inflation. At a time when the public deficit is exploding and Bercy is looking everywhere for sources of savings, under-indexing – and why not de-indexing – appears to be a reasonable option. Politically, this subject, which is still taboo at the Elysée, could return to the table once the European elections of June 9 have passed.
Denouncing “grassroots electoralism”, Antoine Foucher, president of the consulting firm Quintet, calls for “investing massively in education and training, and not in pensions”. This former chief of staff of Muriel Pénicaud, when she was Minister of Labor, pleads for a measure targeted at the most well-off.
Is the option of under-indexing, or even de-indexing, pensions a priority for you with a view to reducing the public deficit?
Antoine Foucher Yes, absolutely. We no longer have a choice, our debt is such that the cost of interest on the debt will exceed the National Education budget in two or three years: 60 billion euros per year. This debt therefore prevents us from investing in education, in the energy transition, in reindustrialization, that is to say in our future. Pension increases at the start of the year represented 20 billion euros in additional spending, on top of the 350 billion already spent on pensions. At the same time, the State has reduced the MaPrimeRénov’ system, the financing of apprenticeships and the budget for higher education and research… The exact opposite of what must be done for the future of the country, as it is obvious that we must invest massively in education and training, and not in pensions. I hope that this is what the government will do in the years to come.
How should we go about it?
First, this deindexation must not be punctual, like a planer. It is important to provide visibility on the evolution of social benefits, and in particular retirement pensions, over several years. A good reason to do so, understandable to all, is to aim for a more equitable intergenerational distribution of wealth between workers and retirees. However, such a structuring question cannot be resolved in the space of a year.
Then, we must make reality known, and give ourselves an objective. All the studies – those of the Retirement Orientation Council, France Stratégie, etc. – show that the average standard of living of retirees is higher than that of workers, which is unprecedented in history. The situation is all the more problematic because current workers constitute the first generation, since 1945, who work no less than their parents, and no longer have the hope of living much better than them. We could therefore imagine collectively setting a reasonable and fair target of a standard of living for retirees of around 90 to 95% of that of working people – this percentage is up for debate – and deciding on a deindexation, therefore without ever reduce pensions in absolute value, the time to achieve it.
This population could argue that they contributed to obtain this right to retirement. Is right ?
Retirees do not always see that their pension does not correspond to the contributions paid during their professional life. This is simply due to demographic reasons. In the 1960s, there were 4 workers for every 1 retiree. In the 1990s, the ratio increased to 3 to 1. Today, it is 1.7 to 1. Under these conditions, the weight of contributions on the shoulders of working people is necessarily heavier: 30% of salaries today today, compared to 15% in the early 1980s.
Simply put, this means that the retirees of 2024 are asking much more of their children than they did for their own parents. We must be aware of it, share it calmly and factually, without triggering a generational war, which would be worse than anything. It is not a question of telling retirees: “You are entitled to what you have contributed, but no more, and therefore we are reducing pensions by 30%.” This would be an extreme and violent solution, but one from which we will not escape if we continue to go into debt. We must do everything we can to avoid reaching this point.
A few years ago, the announcement of under-indexing sparked an outcry…
Yes, under-indexing, we did it – I was at the time the chief of staff of the Minister of Labor, Muriel Pénicaud – in 2018, 2019 and 2020. As by chance, during these three years, the deficit and France’s debt have decreased… We nevertheless made the mistake of not making sufficient distinction according to the level of pension, and the yellow vest movement, at its beginnings, also involved many retirees modest, also scalded by the increase in the CSG.
It would therefore be better to appeal mainly to the wealthiest retirees. It remains to be determined the level from which the pension would no longer be provisionally indexed: the minimum wage of 1,400 euros net? The median salary, 2,000 euros net? In this second case, this would amount to requiring an effort from retirees who earn more with their pension than half of French people who earn their money by working.
Why does the executive appear so reluctant?
This is obvious in all circles that discuss these subjects, in all parties, without exception. But it is taboo in the public debate led by political leaders. The reason is simple: retirees, whose participation rate in elections is 80%, represent 17 million voters and 13.5 million voters. This is the age group that votes the most, by far.
It is therefore a matter of basic electoralism, especially since the wealthiest are those who vote the most. Well-off retirees have become the heart of Emmanuel Macron’s electorate, whose popularity is not at its peak. Note, however, that in 2024 the government carried out the largest increase in years, and yet, polls show that a significant portion of retirees will not vote for the majority in the European elections on June 9. When it is too contrary to the general interest and too visible, “buying” votes does not work.
Is the fear that deindexation having an electoral impact therefore unfounded?
If we only solicit the wealthiest retirees, I don’t think this choice would be too penalizing electorally. The 20% who receive more than 2,000 euros are also the largest holders of assets, they often have other sources of income and have taken full advantage of the spectacular increase in real estate over the past twenty years. It will be difficult for them to protest. We cannot exclude, however, a side effect, with other retirees having the feeling that an entire generation is being attacked. But it can also be seen as a sign of courage, a measure of social justice, as today’s retirees see clearly that their children live and work in a world that is more difficult for France than twenty or forty years ago. years.
Is a change of heart by the executive on this subject possible within the framework of the 2025 finance bill?
This will even be played out beforehand. In mid-June, Matignon traditionally sends each ministry a macroeconomic framework letter forecasting the savings to be made. Calibrating this volume requires knowing what savings are also planned in state spending. We will know this summer whether the hypothesis of a partial and targeted deindexation of retirement pensions is accepted.
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