Alain Parant is a demographer, former researcher at the National Institute for Demographic Studies (INED) and scientific advisor to Futuribles International.
FIGAROVOX. - Opinion studies show that retirees are more in favor of the pension reform that is brewing than working people. Does this reform reflect a generational divide?
Alain PARANT. -
In surveys of people on the measures to be implemented to preserve the financial sustainability of the pension system, opinions appear almost equally divided between four measures: an increase in employee contributions, an extension of the contribution period, a decline of the retirement age, another reform.
In the DREES 2021 opinion barometer, retirees are indeed a little more favorable than working people to extending the contribution period (29% against 24%) and raising the retirement age. (24% against 20%), but both are massively opposed to a reduction in the pensions paid (only 2% in favor).
If they were translated into practice, the proposals to raise the legal retirement age to 64 years and to extend the contribution period to 43 years from 2027 to benefit from a full pension would certainly be better received. by retirees (who would like their pensions to be more or less protected in the short to medium term) than by working people.
Can we therefore speak of a generational divide?
For this, working people and retirees would have to constitute two perfectly homogeneous groups;
what they are not.
What affinities, what interests do a young active graduate from a Grande Ecole really share with a construction worker a few years away from asserting his retirement rights?
What affinities unite a newly retired executive woman, living as a couple and having a pension allowing her to satisfy more than her essential needs, and a former surface technician aged 80 or over, living alone and receiving the minimum old age?
It would be better to speak of a categorical fracture.
These figures should not fuel the feeling among young working people that they are contributing in vain for their retirement.
This will be what they themselves and their descendants decide it to be.
Alain Parant
What are the consequences of the aging of the population on our pension system? Does it fuel the feeling among young working people of contributing to a retirement they will never receive, or very late?
The mechanical effects of demographic aging on the social protection system, the retirement and health branches in particular which are the most impacted by the phenomenon, have been analyzed for a long time in France.
In 2021, France Strategy has put the work back on the job based on the national transfer accounts which allow us to know what average amount of aid and various allowances a person of a given age receives and what average amount they paid in the form of social security contributions, taxes and levies to finance social protection.
Adopting the central scenario of the latest INSEE population projections, it notably simulated what
would have been social protection expenditure and revenue in France in 2019 with the age profiles of expenditure and revenue for 2019 and with the age structure expected in 2040. Expenditure would have been 102 billion euros higher than its actual amount observed (+15%), most of it being concentrated on the two items retirement (427 billion euros instead of 340 billion effective) and health (196 billion euros instead of 176 billion effective), and receipts would have were 20 billion euros lower than the amount actually observed (minus 3%).
This is enough to say how much future aging will exert massive pressure on the social accounts for the next 20 years.
euros to their amount actually observed (+15%), the main part being concentrated on the two items pension (427 billion euros instead of 340 billion effective) and health (196 billion euros instead of 176 billion effective) , and revenues would have been lower by 20 billion euros compared to their amount actually observed (minus 3%).
This is enough to say how much future aging will exert massive pressure on the social accounts for the next 20 years.
euros to their amount actually observed (+15%), the main part being concentrated on the two items pension (427 billion euros instead of 340 billion effective) and health (196 billion euros instead of 176 billion effective) , and revenues would have been lower by 20 billion euros compared to their amount actually observed (minus 3%).
This is enough to say how much future aging will exert massive pressure on the social accounts for the next 20 years.
euros compared to their actually observed amount (minus 3%).
This is enough to say how much future aging will exert massive pressure on the social accounts for the next 20 years.
euros compared to their actually observed amount (minus 3%).
This is enough to say how much future aging will exert massive pressure on the social accounts for the next 20 years.
Pensions: the executive must also convince its allies
These figures should not fuel the feeling among young working people that they are contributing in vain for their retirement.
This will be what they themselves and their descendants (future contributors) decide it to be.
The terms then in force will be the result of arbitrations made with the following generations of assets.
Whether the social protection system still favors the principle of distribution or whether it makes more room for the principle of capitalization, it will be necessary to decide between deducting more from earned income, working longer, limiting the amount of pensions... or let the system drift.
The median standard of living of retirees is higher than that of working people. Is our system viable if retirees don't also make an effort?
In 2020, the average direct pension for retirees residing in France was 1,510 euros gross per month, all schemes combined, i.e. 1,400 euros net per month.
The average full-time equivalent salary in the private sector was around 2,500 euros net of contributions and contributions;
in the civil service it was around 2,400 euros.
Although they have resources other than their pensions, in particular income from assets that is on average higher than that received by working people, retirees have, on average, a smaller budget than working people.
If their median standard of living is slightly higher than that of working people (1,900 euros per month against 1,840 euros in 2020; source DREES), it is because they more rarely have dependent children and their households are consequently
Median standard of living a little higher than the average, poverty rate lower than the average, old age is no longer synonymous with economic distress as it once was.
Alain Parant
Median standard of living a little higher than the average, poverty rate lower than the average, old age is no longer synonymous with economic distress as it once was.
It is a collective success whose preservation is far from certain.
Since 1987, in order to restore the financial balance of the various schemes, pensions are no longer indexed to wages but to prices.
If the average purchasing power of retirees is increasing even though prices are changing more slowly than salaries, it is only because people who are about to retire have had better careers than their elders, especially women.
But this beneficent substitution is not destined to last when the
The pension contributions of an employee born in the 1940s were on average €600 per month (in constant euros). Those of an asset currently in office amount to €890. What conclusions can be drawn from this figure?
Workers born in the 1940s generally entered the labor market in the 1960s and left it in the 2000s. Until the 1980s, their contributions and those of their employers financed a pension system that was growing steadily. and paid pensions that were still relatively modest on average, to recipients who legally ceased their activity at the age of 65, were therefore few in number and received their pension for relatively short periods.
Current employees and their employers contribute to a fully mature pension system that provides more generous pensions on average to a significantly larger population of retirees due to the past baby boom, a earlier activity and
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In absolute terms, the increase in contributions is certainly not minimal, but it must be weighed against the growth in needs to be met and also note that it would have been substantially higher, all other things being equal, without the measures taken to raise the working age and limit the purchasing power of pensions.
