There are reserves for pensions amounting to 150 billion euros. The argument has resurfaced since the presentation of the pension reform project in early January, which resets the retirement age to 64. Especially since the government is defending its bill by emphasizing “the balance of the system” to be achieved in 2030 and the deficits that must not be allowed to accumulate.
“What will happen to the 150 billion reserves in the pension system? ‘ asks one user in a viral post. “Do we have to imagine that this government is lying to us on this issue as well? ‘ outraged Martine Wonner, the ex-MP who became known for opposing health measures in the Covid-19 crisis, in a tweet shared 2,000 times.
To support these comments, an excerpt of an interview with economist Gilles Raveaud at BFM Business is attached. He said there in December 2019, when the first pension reform project wanted by Emmanuel Macron was launched, that there were “at least 150 billion euros in reserves for pensions”.
He referred in particular to the pension reserve fund set up by Lionel Jospin and to the supplementary pension scheme, which also has a reserve fund. For the lecturer at the University of Paris-8 “there is [avait] no problems with pension financing”.
NOT CORRECT
These reserves are in place and their amount has actually increased since 2019. Thus, according to the report of the Pensions Orientation Council (COR) published in September 2022, the reserves in the pay-as-you-go system amount to 180.4 billion euros as of December 31, 2021. Agirc-Arrco, a supplementary scheme for private sector workers, has 86.5 billion euro reserve the best cover. The reserve fund for pensions (FRR) also amounts to 26 billion euros. The COR, a sort of magistrate on the subject, is an independent and pluralistic body in charge of analyzing and monitoring the medium and long-term prospects of the French pension system.
Screenshot of the table showing the amounts of financial reserves within the PAYG pension system published in the COR 2022 report. – Screenshot/COR
But, explains Pierre-Yves Chanu, Federal Councilor of the CGT at COR, these reserves are “working capital, they are a safety cushion to guarantee the payment of pensions. »
“The reserve funds are not fungible,” he explains. They cannot be used by the government, not under the current conditions, as it is a joint system managed exclusively by the social partners. »
“The failure” of the 2019 reform
In July 2019, the Delevoye report provided for the possibility of drawing on these reserves after negotiations with the social partners. However, the reform presented in December 2019 envisaged the creation of a universal pension system by merging the 42 existing systems, which is no longer the case today. “In the logic of a universal system, with a single system for employees and non-employees, we could pool the reserves, notes Pierre-Yves Chanu, but the social partners, like the self-employed, did not want to hear about it, this is one of the reasons for the failure of the Reform. »
This option is no longer on the agenda in 2023, according to the CGT Confederation Advisor. The prime minister’s office has not yet responded to our query. In 2021, the Office of the Secretary of State responsible for pensions confirmed to AFP that “in the rule of law (…) the state has no basis for mobilization [ces réserves] with the aim of ensuring the balance of the general system” and that these “do not have to finance structural deficits but must absorb demographic or economic shocks such as the loss of contributions during the health crisis”.
To reform or not to reform, a political choice
The basic question actually relates to the deficit of the pension system. For the government, reforms are “urgent” and “essential” to ensure the balance of the regime, as demanded by Economics Minister Bruno Le Maire and Finance Minister Gabriel Attal. Trade unions and opposition parties think exactly the opposite. “The pension system can be balanced and the necessary funds must be made available for this,” defends Pierre-Yves Chanu. For us at CGT, this means an increase in contributions. »
In its report, the CoR estimates that the pension system will be “in deficit on average over the next 25 years”, mainly due to the aging of the population. But the decision to reform is political. The CoR also states that it is not its role “to comment on the choice of the size of the pension system”.
“Depending on political preferences, it is perfectly legitimate to defend that these levels are too high or not high enough and that reform of the pension system should or should not be implemented,” it said. However, the report notes that the results of the projections to 2070 “do not confirm the validity of the discourse that put forward the idea of uncontrolled dynamics in pension spending.”