She was far from the spotlight, but she is slowly returning to the light. The pension reform, missing for several months because of the health crisis, has just returned to the scene. At the beginning of June, Emmanuel Macron had already sent a shiver down the backs of the unions by explaining that “nothing is[était] excluded ”as to the future of the reform, even if it could not be“ taken up again as it is ”.
This week is the report led by economists Olivier Blanchard and Jean Tirole who brought this flammable debate up to date. Commissioned by Emmanuel Macron himself, the document – of 500 pages – focuses on the major “economic challenges” of France, including “the aging of the population”. The pension reform is presented as necessary, the authors even noting that the government project is “an excellent starting point”.
Towards point retirement?
The Blanchard-Tirole report therefore validates the principle of a retirement by points, and no longer by quarters. Depending on their income, each would accumulate points, which are then converted into euros when they retire.
The authors give the example of an employee who would be paid all his life at the average salary. “An average career of forty-three years would allow to acquire 4,300 points [soit 100 points par an]. The initial service value [permettant de convertir les points en euros] could be set at 4 euros, or a pension of 17,200 euros per year or 1,435 euros per month ”.
“Free points” and “newsletters”
On the other hand, warn economists, adjustments are essential in order to avoid massive rejection by the population: “Certain unpopular measures such as (…) a lowering of the effective retirement age must be registered, to be accepted. , in a global approach, a broader set of measures ”. Between 2019 and early 2020, many strikes and demonstrations had indeed shown the existence of strong opposition to this reform. The government had finally decided to use 49-3 to shorten the debate, a few weeks before the first confinement, which had frozen the situation.
In order for the reform to gain more support, the authors recommend, for example, granting “free points” to workers with the lowest wages. The aim is to prevent them from ending up with a retirement pension that is too low. Another idea: no longer to focus on a universal “pivotal age” (age below which the pension would be reduced), but rather to propose a “departure window”, more individualized. Working people would then be informed – via “newsletters” – of the amount of their pension according to their retirement age.
“We must act quickly”
Despite these adjustments, the heart of the reform, namely the extension of careers, is not called into question. “The retirement system should be reformed by raising the average retirement age, by strengthening incentives to work beyond the minimum retirement age,” the authors write. Who warn: “no reform of the pension system can be done without there being losers”. “We must act quickly, before the financial difficulties put total pressure on the pension system and public finances,” they implore.
This alarmist observation is not unanimous among economists. “The whole report spins the metaphor of the time bomb, which is in contradiction with the analyzes of the retirement guidance council (COR),” said Michael Zemmour, professor and researcher in economics at the University of Paris-I and associate researcher at Sciences-Po (Liepp). There is no imminent danger of system failure. If tomorrow, we want to balance the pension system, we would have to increase the contribution rate by less than one point ”.
However, continues the teacher, “the argument of the authors of the report is one-sided. Increasing the system’s revenue (via contributions) is excluded from the outset from the field of solutions, although it is a possible political choice. And without additional revenue, pensions will go down, even with a later retirement. So the whole issue of the report, ultimately, is to know how to make this observation acceptable to citizens ”.
“In listening mode”
It remains to be seen what Emmanuel Macron will do with it. On the Elysee side, it is prudently explained that the report is “a contribution to public debate” and that the President of the Republic had not fixed in advance the themes addressed by economists.
“He is in listening mode” continues the same source, who refuses to advance on a possible timetable for pension reform. To believe the Parisian, Emmanuel Macron could nevertheless speak on the subject before July 14. With less than a year before the presidential election, the executive knows that it does not have much time if it wants to change the rules of the game.