“Pension reform will be stormy,” notes François Langley

"Pension reform will be stormy," notes François Langley

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Pension reform, a major unfinished project of Emanuel Macron’s first five-year term, will be stormed. The consultation should in principle start by the end of the summer at the latest, as the winds rise.

First of all, the winds are economical, with the undeniable fall of purchasing power this year, under the influence of inflation, and this, despite the tariff tariff on energy, the reduction of fuel taxes and more. checks or inflation allowances. It will bite, especially if the rise in prices accelerates, as one might be afraid to seecurrent food products.

At the same time, growth slows down, after intense recovery after Covid that we knew. The eurozone average is just above zero and Bruno Le Maire warned on Thursday: “the most difficult part is ahead of us”.

Political reform

Politically, Emanuel Macron does not have a very clear plan. Before the first round, he announced raising the legal age to 65. The next day, he crossed his skis, citing at the same time 64 years, a review clause and possible referendum ? It’s not the same.

Then the opposition caravanserai will unite on this issue: Jean-Luc Mélenchon and his new associates as well as Marine Le Pen all want a return to 60 years. Even if they do not have the majority, they will hit pots, and will make noise.

Opponents of the reform argue that basically, there is no urgency, according to expert reports. Only these references are very practical, why follow and contradict each other. Therefore, one can choose the one that suits his dissertation. Whatever is said about pensions, there is always a report from the CoR (Retirement Guidance Council) that approves.

The latter indeed explains to us that all other things being equal, there is no fire. It is obviously the “elsewhere” that is important in this sentence. And a recent article in Comments magazine sheds light on the real state of our retirement finances. We are very far from balance.

Huge sums were paid

The latest data from the CoR, which show a deficit of 13 billion for 2020, do not show compensatory subsidies paid by the state, considered as normal receipts. While a private employer contributes 16% of salary retired, Thus, the state employer contributes 74% for civil servants, 126% for the army and about 30% for hospital staff. To put it another way, for 100 euros of net salary paid to a civil servant, the state pays 77 euros responsible pension.

Demographic imbalance partly explains these differences in payments. In SNCF, for example, there is fewer active actors than retirees. Not to mention anything about Mines, which has more new affiliatesin complete extinction since 2010.

After the replacement rate, ie the relative amount of pensions in relation to the salary, is better in the public sector than in the private sector. If all these subsidies are taken into account, the pension deficit in 2020 is not 13, but 43 billion in one year. A figure confirmed by the excellent François Ecalle, from Fipeco. The 2019 pension deficit, thus corrected, if one may say so, represented very simply almost half of the French public deficits.

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