Will the current system be in deficit in only one out of four scenarios?

If you’ve been tuned into the morning TV and radio shows in recent days, you couldn’t miss him. The economist Thomas Porcher is regularly invited to discuss his point of view on the pension system. Unlike many of his colleagues, he is optimistic about the financial future of the current system: “The pension system is in surplus today. It is hypothetically in deficit, in about ten years, in one out of four scenarios of the Pensions Orientation Council (…). Long-term predictions should be taken with caution. »

Words that immediately led to strong reactions from his colleagues. “It is totally false. The system is in deficit until 2039 in ALL COR scenarios”, rose [email protected], teacher in economics and public finance, on Twitter. What is it really ? 20 minutes make the point.


As a reminder, these are only long-term projections, which should therefore be taken with caution. They can vary relatively significantly, as Thomas Porcher reminded us. In the latest report from the Pensions Orientation Council (COR), published in September 2022, is calculated based on the expected productivity rate. Four scenarios are produced, then declined within two groups, which finally gives eight scenarios.

The first group is established under the assumption of a permanent equilibrium of regimes (EPR). This “reflects the current legislation of the pension system” notes the COR, that is to say that the state employer is limited to balancing the system of state employees and special systems. It has the advantage of “warning about the need for funding of schemes that do not benefit from balancing subsidies”. The report also explains that this group, on the other hand, gives “no indication of the financial situation of the schemes financially balanced by the State”. As the latter are automatically balanced, they cannot be in deficit.

The second is established under the so-called “constant state effort” (EEC) convention. In this scenario, the State maintains its contribution, but as a percentage of GDP, and for the entire pension system. This agreement makes it possible, according to the COR, “to highlight the redeployment of financial flows that it would be possible to operate between the balanced schemes, whose expenditure is expected to decrease, and the other schemes, once the contribution of the State to the financing of pensions would remain constant as a share of GDP”. It is this second group that Thomas Porcher considers.

Turning now to the second group, we come to our question: Is there only one scenario out of the four that foresees a deficit pension system? According to the COR report, the graph on page 100 indicates that the first scenario to return to equilibrium (1.6% productivity) is in 2039, therefore in 17 years. The second (1.3% productivity) will be in 2043 and the third (1% productivity) in 2058, so in thirty-six years. The fourth scenario remains permanently in deficit (-0.7% of GDP).

However, it is not even this group of scenarios that reflects the reality of the current pension system, but the first one. And in this case, the forecasts are much more pessimistic. The only one to return to equilibrium (1.6% productivity) will be in 2058. The three other scenarios do not return to equilibrium, and the curves of two scenarios (1% and 0.7% productivity) are still falling at the end of the estimates in 2070. @fipaddict is therefore right to say that “the system is in deficit until 2039 in ALL COR scenarios”, in this case the eight.

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