The Limited Times

Now you can see non-English news...

The secret note on pensions: five scenarios for reform

2020-07-12T05:49:15.251Z


Savings measures to put the system afloat, "modifications" to the reform already voted by the deputies ... A secret note from the govern


On the burning pension reform, what idea is running through the head of the executive? Barely in office, Jean Castex, the all-new Prime Minister, urged by Emmanuel Macron to settle the file “in the short term” - in particular to absorb a deficit linked to the crisis estimated at 30 billion euros in 2020 (by the Pension Orientation Council) -, was met at the end of the week by the unanimous refusal of all its union and employer representatives.

Will he move forward on immediate savings, as he has already suggested? And what will become of the systemic reform by points voted in March by deputies, and left on pause since the Covid-19 crisis, which the tenant of Matignon says he wants to deal with in a second time?

Part of the answers may well be found in a secret note from the Social Security department dated May and intended for the ministers in charge before the reshuffle, which we obtained. Written during confinement, its purpose could not be more explicit: "The future of the pension reform project". "If it were considered that the political context born of the health crisis made it impossible to resume the systemic reform project as it is, this note and the files are intended to assess alternative pension reform scenarios to the current project", we read in the preamble. We reveal in detail the three scenarios explored deemed most likely by the note writers and which are compatible with each other.

Scenario 1: the grandfather clause

It is the piece of choice presented as "the best fallback solution" in the note! Instead of applying - as provided for in the law - a transition period for insured persons to gradually switch from one system to another from 2022, the note recommends reserving the universal points system for only new entrants to the labor market: young people born from 2004 (who will be retiring as soon as possible around 2065-2070).

An "integral grandfather clause" which would present "greater social acceptability" in times of crisis, and "solves a number of difficulties linked to the transition in terms of opening conditions and calculation of rights, in particular the cost financial compensation necessary for its acceptance, "write the authors.

Furthermore, this scenario, they continue, has the advantage "of being relatively legible because it is close to the current project, while emptying it of part of its sensitivity by postponing its application". He nevertheless had "political disadvantages": "the use of the grandfather clause" could be compared to abandoning the reform and implicit validation of the critics ...

Scenario # 2: a two-story retreat for everyone

Echoing a proposal made by some of the social partners, instead of the great upheaval of the universal system, it is a question of preserving the architecture of the current system organized in two stages (base and complementary). Concretely, a 1st floor with a single basic plan (identical calculation rules for all and convergence of contributions). This common base, the 1st floor, "could take the form of a universal system limited to a ceiling, or a generalization of the rules of the general regime to all basic regimes," said the note.

On the 2nd floor, the maintenance of complementary plans adapted to each type of profession organized, for example, in three silos: a private, a self-employed and a public (the only one that does not exist). A scenario that responds to "criticism of the standardization of the pension system at the expense of risk depending on the profession and career profile".

“It pays me” newsletter

The newsletter that improves your purchasing power

I'm registering

Your email address is collected by Le Parisien to allow you to receive our news and commercial offers. Find out more

The note nevertheless lists several "disadvantages": the end of the rule of the last six months for civil servants and insured persons in special schemes; and the need to create a complementary fund for them. But also a necessary convergence of contributions which could hold up lawyers in particular, without counting all the Liberals on whom we would impose a transformation of the basic pension. A scenario which could nevertheless not displease the social partners, except the CFDT which is due to the universal system.

Scenario 5: Savings measures for all

It is the immediate and most flammable subject. We will have to work longer, as Emmanuel Macron once again mentioned recently. The challenge is to improve "the balance of the pension system", in addition to possible revenue measures that the note does not explore. What does it recommend?

First, the authors write, in terms of age measures, it is "technically possible to raise the legal retirement age" to 64 years: three months per generation from the generation of 1962. But also "the introduction of a minimum age of the full rate (without discount) which can be combined with a drop in the age of the full rate", the first would increase to 63 or 64 years (against 62 years currently) and the the second would be reduced from 67 to 65.

Two measures that would allow significant savings. "It will be recalled that at the end of the 2008 crisis, it was the solution of the increase in the legal age from 60 to 62 years that had been adopted" for the 2010 pension reform, they recall.

In terms of subscription duration, they propose to speed up the application of the Touraine calendar. Or an additional quarter per generation instead of an additional quarter every three years as currently, in order to reach 43 or 44 years more quickly. Long career arrangements would not be spared, even if the expected savings are more negligible.

Finally, concerning pension levels, the note does not rule out the path of a lower revaluation as in 2019 and 2020. "The President of the Republic has, of course, announced that pensions will again be fully indexed to prices at from 2021, but the economic context has changed, ”they conclude.

Less likely scenarios 3 and 4

The 3 would move away from the bill and restrict it to a few measures "of great political significance", in particular the disappearance of special regimes. Le 4, for its part, plans to rationalize governance by reducing the number of caisses and their staff, with an assumed objective of “lower management costs” which had never been explicitly assumed until now. Neither of these two scenarios is preferred, unlike the other three.

The television interview with the President of the Republic on Tuesday July 14, followed by the Prime Minister's general policy speech on Wednesday, should lift part of the veil.

Source: leparis

All business articles on 2020-07-12

You may like

Business 2024-02-29T07:33:53.729Z

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.