Retirement: the legal departure age at 66.5, the only option to save the system?

In its report presented this Thursday, June 12, the pension orientation council notes that the minimum age to liquidate its pension will have to further increase in the coming decades. For the president of the COR, the balance of the French pension system is at this price.

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There retirement at 64 From the generation born in 1968 is still far from being digested by many French people. And yet, the assets can legitimately fear that this terminal will be repelled again. This is in any case the position defended by the Pension Orientation Council (COR), at least its President Gilbert this, which presented this annual report on the developments and prospects of pensions in France on Thursday, June 12. A 242 -page document which particularly irritates the unions since, even if it is anything but unanimous among the members of the COR, a track to finance the French retirement system clearly holds the rope there: again raising the legal age of departure. As a reminder of one of the three levers regularly studied by this independent institution, responsible for analyzing and monitoring the medium and long -term perspectives of the French pension system.

An option that is no longer really one, to read the document adopted by the members of the horn this Thursday. If the final text has been reduced of some formulations contested by the unions, and that the report specifies that the simulations presented there “Have an educational vocation; and that they do not in any way constitute reform proposals ”the message is clear. So, “To structurally balance the pension system each year until 2070 via the lever of the retirement age, it would be necessary to bring this age to 64.3 years in 2030, 65.9 years in 2045 and 66.5 years in 2070”is it indicated. A 66.5 year old terminal which would be well above the average retirement age projected in 2070, 64.6 years.

The pensions deficit left to explode by 2070

Certainly other options exist on paper. Starting with the Relative drop in pensionsan alternative envisaged last February by the Court of Auditors, which judged that a sub-indexation would have an impact “weak” on the economy. A track also mentioned in the COR report: “By acting only on pensions (to structurally balance the pension system each year until 2070, editor’s note), the relative average pension should decrease by 0.6 points in 2030 and 4.5 points in 2070”calculate the council. But, like the increase in contributions, it would be a “recessive” measure, qualifies the Cor. The downward moderation of pensions, as well as the increase in levies to finance pensions, would indeed be harmful to the French economy, the first decreasing household income, and therefore demand, the second increasing the cost of labor, which would then impact employment and growth.

To read the COR report, the only solution therefore seems to note, once again, the legal retirement age. And certainly not to freeze at 63 years its increase provided for by the last pension reform, a decision which would have a cost, by 2035, of “5.8 billion euros for the pension system alone and 7.2 billion euros for other public revenues”recalls the Council, quoting the Court of Auditors.

On the contrary, with the reference scenario retained by the COR (unemployment of 7%, growth in hourly labor productivity of 0.7% per year, continuation of life expectancy, fertility rate of 1.8 children per woman, migration balance of 70,000 people per year), it is indeed a new effort that will have to be made to balance the finances of the retirement system. Because according to Gilbert this, with identical legislation and even taking into account the last pension reform, the system deficit should flambé in the coming decades, going from 0.2 point of gross domestic product (GDP), or 6.6 billion euros, in 2030, to 1.4 point of GDP in 2070. Anticipation close to that of the Court of Auditors which, last February, deficit of 15 billion euros in 2035 and 30 billion in 2045 for our pension system.