There is no doubt that the subject of pensions will fuel the debates during the Christmas meal… At the risk of turning the festivities into fiery discussions between the supporters won over to the government’s arguments on the need to postpone the legal age to 65, and the opponents convinced that there is no real financial problem with the regime, as the unions insist. To avoid the drama in the middle of the turkey and the log, reading the latest note from the left-wing think tank Terra Nova, titled “Another reform is possible” and published Thursday, December 22, could she serve as a justice of the peace? In any case, it will be able to give food for thought to the discussions.
“If a pension reform is legitimate and necessary, there is nevertheless room for another reform which is both budgetary efficient and socially fairer”, writes the author, a teacher in economics and public finance wearing the pseudonym Fipaddict. The funding problem is the first observation made by the think tank. “Going into debt to pay pensions is to burden future generations with a debt that has no counterpart in terms of public assets”, underlines the author of the note. The analysis of the unions, which put forward a return to balance even in the absence of reform in the coming years based on the projections of the COR (Council of orientation of the pensions), constitutes according to its terms “a biased reading of forecasts”. By retaining the most probable growth scenarios, the study concludes that “all the scenarios converge on the existence of a structural pension deficit until at least 2043”.
Three ingredients
If the observation is identical to that made by the government, the solutions proposed by the author of the note diverge. “Raising the legal age to 65 is not the only solution”, he observes, even if an effort on this criterion is not “illegitimate”. But he recalls that two other levers swept away by the government exist: the increase in revenue and the reduction in pensions paid. “Mobilizing the lever of age alone amounts to concentrating substantial savings on a small number of people, namely the working people who are close to retirement and will have to postpone their departure because of the reform”, observes the author of Note. Even if the lever of increasing the career would be used, the currently favored track of raising the retirement age is not the only option: increasing the duration of contributions, less unfavorable to the most modest, could be used.
To achieve a cocktail “sustainable both financially and socially”, the Terra Nova note offers three ingredients. First, a “reasonable” increase in the retirement age, with an “increase in the contribution period to 43 years provided for by the Touraine reform, while increasing the legal age to 63 instead of 65 years”.
Second element, the contribution of companies, with the end to exemptions from contributions between 1.6 and 3.5 Smic, and retirees, via a deindexation of their pensions, an indexation on “underlying inflation” (excluding food and energy) or “intergenerational solidarity clause” in the event of an inflationary shock (indexation on wages and not on prices). Finally, the note pleads for a reinvestment of the savings generated to put in place support measures for the most modest.