The deficit of the French pension system should approach 30 billion euros in 2020, due to the Covid-19 crisis, according to a provisional estimate published Friday by the Pensions Guidance Council (COR). According to COR projections, the balance of the pension system would amount to -29.4 billion euros at the end of the year, instead of the -4.2 billion euros initially planned.
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This sharp deterioration, of more than 25 billion euros, is explained by the fall in revenues (-25.7 billion), linked to the deferrals and exemptions from contributions as well as to the stopping of "whole sections of the economy "in recent weeks. Revenues should thus cap at 310.8 billion euros, specifies the COR. This deterioration is not offset by a drop in spending of around 500 million euros: it would total 340.2 billion euros. A difference linked to the high mortality observed in recent months among the elderly.
In addition, as of June 11, the COR estimates that the average net pension will increase by 1.2%, while the average net compensation will decrease by 5.3% between 2019 and 2020. This development will raise the standard of living average of retirees, which would drop from 104.8% of that of the total population, last year, to 110.3% in 2020.
Please note, however, that the COR warns that these estimates are likely to change significantly in the coming months. " This first assessment " is indeed " marked by very strong uncertainties on the still provisional statistical assessment of excess mortality ", but also on " the future of the disease and the economic effects of the crisis in 2020 ", recalls he.