A short-lived improvement. While the government has postponed the pension reform several times, without abandoning the idea, the Pensions Orientation Council (COR) has calculated that the system has generated a surplus of 900 million euros in 2021, for the first time since the 2008 crisis. Better, the institution which publishes a report each year on the subject expects a surplus of 3.2 billion this year. However, in the longer term, the situation risks deteriorating again.
A surplus due to growth
After a deficit of around 13 to 14 billion euros in 2020, the accounts have returned to the green thanks to “the strong recovery in growth” last year, explains the latest report, to be published this Thursday. The effects of the health crisis have therefore faded, after plunging the balance sheet of the system. The recovery, which resulted in strong demand, boosted contribution receipts. If the plans are not all equal vis-à-vis this mechanism, the overall balance is back in the positive.
A new plunge from 2023
The overall balance of French pension schemes should however “degrade significantly” from 2023, and its return to balance is still projected “around the middle of the 2030s” in the best of scenarios, explains the Pensions Orientation Council . An observation, shared by the Minister of Labor. In an interview at Point, Olivier Dussopt affirmed that the system remained “structurally in deficit”, and announced that he will have “an exchange with the social partners on September 19 on the basis (of this) report”. The challenge ? Hold the annual increase in public spending at 0.6%, as the government promised in Brussels last July in its “stability programme”.
Worse assumptions
This annual report is also “marked by new hypotheses (…) more unfavorable in the long term”. In particular, the COR has revised its main economic indicator downwards: labor “productivity gains” are now within a range of 0.7% to 1.6% per year, against 1% to 1.8% previously.
Another source of pessimism: while the government is counting on “a drop to 5% in 2027”, the COR is still considering a “target” of 7% in the long term. Even by reducing it to 4.5%, “the deficit would be less” but would not disappear. This partly explains the maintenance of a “financing requirement” at “horizon 2070” in four of the eight scenarios considered.
Other scenarios explore a more favorable future, the best giving a system in equilibrium around the 2030s. And if the rules governing pensions do not change, on the basis of a 1.6% increase in productivity the “hole” should only be filled “in the mid-2050s”.
No blank check in the government
If the COR thus predicts that “the pension system would be in deficit on average over the next 25 years”, while emphasizing its work, “does not validate the validity of the speeches which put forward the idea of an uncontrolled dynamic retirement expenses. A nod to the interventions of Elisabeth Borne, who often presents the pension reform envisaged by the government from 2023, with in particular the postponement of the retirement age from 62 to 65, as a necessary step to maintain the system.
A busy schedule
While the government’s observation is therefore reaffirmed by this report, it does not commit to the solutions to be implemented. Another report should consolidate this inventory, in the coming weeks, that of the Pension Monitoring Committee (CSR). It can issue recommendations, which it did in particular in 2017, 2018 and 2019.
This new report will therefore be scrutinized, especially since the Minister of Labor explained that “the question of the age or the duration of contributions” and that “of the pace of implementation”, was open before “an exchange with the social partners on September 19” on this explosive subject.
Already scalded by the new unemployment insurance reform initiated last week, the unions refuse for their part to reopen the file. “Put oil on the fire with the pension reform, that would be crazy”, warned the general secretary of the CFDT Laurent Berger.