By Gerard Filoche * and Jean-Jacques Chavigni **
1. What is the state of cons-pension reforms since 1993 for retirees and future retirees?
The fall in the amount of pension is like a movie in slow motion. It is only very gradually that these reforms will produce all its consequences. But ultimately, these consequences will be catastrophic.
The "reform" Balladur-Veil of 1993 was contested in the month of August in the general scheme of private sector employees. It increased the contribution period annuities of 2.5 (37.5 to 40). It has increased the number of the best years taken into account in the calculation of retirement from 10 to 25 years. Finally, the evolution of pensions were no longer indexed to wages, but on price.
The reforms of 1993, 1994, 1996 and 2003 supplementary pensions (Arrco - Association for the supplemental pension plan for employees - for all employees and Agirc - General Association of Pension Institutions frameworks - for executives) have resulted in an increase in the purchase price of the point value and a decrease in point value as the basis for calculation of retirement and therefore a decrease in the amount of those pensions.
Today, already more than a million pensioners live below the poverty line and 50% of retirees have a pension of less than 1000 euros. The measures taken by the right and the MEDEF [employers' organization in France] have exacerbated inequalities for all people whose career has not been smooth sailing. Especially women, whose pensions are already 40% lower than that of men who are now penalized by lengthening the contribution period and the severity of discounts.
In its 2007 report, the Board of the Pensions (NRC) estimated that 19-point decline in the average amount of pensions in 2030 as a result of "reforms" of 1993 to 2003. In 1993, the average net pension amounted to 78% of average net wages. In 2030 it will rise more than 59% of net average wage. The Council for Employment, Income and Social Cohesion (CERC) estimates, in turn, lower purchasing power of retired · e ⋅ s Public Service 0.5% per year and those of salaried · e ⋅ s private sector 0.9% (0.3% for the general scheme and 0.6% for supplementary pensions).
But this is not enough to the right and the MEDEF who want to continue to reduce the amount of unfunded pension while claiming the opposite hand on the heart. If we let them, in 2030, the vast majority of retirees will be under the poverty line.
2. Why must strenuously defend retirement at 60?
Many great minds (on the right but, unfortunately, also at left) tell us that the retirement age has more interest now that the contribution period increased to 40 and soon 42 years. Considering that the regressions imposed by the right are now parts of the pension landscape, it is indeed difficult to imagine how a young person who would begin working at age 25 and who should contribute for 42 years could expect to retire at 60 years. A simple sum shows he could not claim a full pension before age 67.
But if it is useless to discuss the legal retirement age, why is she so right to move the cursor? Because she knows that as long as this law exists, as this benchmark will be maintained, the employee · e ⋅ s may require that such right is not a mere inchoate right, but are put in place arrangements concrete that would allow the vast majority of employees can take their full pension at age 60.
Two other reasons can also the sense of maintaining the right to retire at age 60.
More than one million employees, first, have the entire period required for a full pension, but can not retire because they have not yet age 60. They have yet to work 2 or 3 years. With a legal age to 62 years is 4 or 5 years they would have to stay at work.
Second, because the decline or disappearance of the right to retire at 60 would almost automatically skip the lock 65. However, this lock is essential. It allows an employee whose career is incomplete to qualify for a full pension when he reaches the age of 65. They are, today, especially women who are concerned with 23% of women can benefit from a full pension before age 65. If the legal age of retirement was going to disappear or 62 years, Medef would use this setback as soon as leverage to impose the death of the buffer that is the age of 65.
For those who doubt the intentions of the MEDEF, they should remember that the MEDEF calls for the disappearance of two ages 60 and bumpers 65. They should also remember that in December 2000, the MEDEF had refused to help finance the supplementary pensions between 60 and 65 and that only the mobilization of more than 2 million workers had forced it to retreat. It should, finally, they do not forget that MEDEF had recurred blackmail in 2009 and a new negotiation on supplementary pensions is provided at the end of 2010.
3. Inevitable demographic she weighs about our pensions?
There were 11 million pensioners in 2000, they will be 21 million in 2040. It is a fact, an order of magnitude must. But this fact needs to be analyzed in detail and in context to draw all the consequences.
Firstly, the increase in the number of pensioners is due to two factors that weigh both the same weight: the lengthening of life and the arrival at the age of retirement of generation of "baby boomers" born between 1946 and 1976. But the latest additions to the generation of "baby boomers" will reach retirement age between 2036 and 2040. This will then " cohorts "who arrive at retirement age and from 2036-2040, the number of retirees will start to decrease.
The lengthening of life is not one quarter per year as loudly proclaim Sarkozy, Guéant [Claude Gueant secretary general of the Elysee] and Parisot [Laurence Parisot, the boss of the MEDEF] but quarter of 0.44 per year as estimated by the NRC report of 2007, based on the latest data from INSEE [National Institute of Statistics and Economic Studies]. As the fertility rate of women would not like the $ 1.7 provided the first scenarios of the NRC, but closer to 2. In total, the population of working age would not suffer a decrease of 2.2 million people between 2006 and 2050 as in previous scenarios of the NRC, but remain stable. As for the increasing number of elderly, it would be less, because mortality would decline less rapidly than expected. The number of retirees would be below 650,000 in 2050 compared to the average of the previous two assumptions used by the NRC.
It is not enough, then, that the population of working age increases. Even then it has to have real work. This is not the path that is taken today with the increase in the number of unemployed due to the economic crisis.
To reduce mass unemployment, the resumption of growth will not suffice. In the medium term, in fact, increased labor productivity will nullify the effects of growth and not allow unemployment to fall. We must draw lessons from all of the 35 hours. Despite all the concessions made to the employers, who have strongly limited its effect, they had created 500 '000 additional jobs and start for the first time in 20 years to actually reducing mass unemployment. Reduce working time is a measure inescapable alone will end the unemployment and thereby improve the financial stability of our pension schemes.
Doubling the number of retirees, finally, will not happen in a France whose wealth would remain the same as today. In 40 years, with a growth rate of (modest) of 1.7% per year, the GDP of our country will double. In 2050, the amount of national wealth will be increased from 1900 billion to over 3.8 trillion euros 3 800 billion, once offset inflation that is to say the euro will have the same value as the current euros, of real dollars.
Doubling the number of retirees implies, if one wants to return to the "reforms" that have hit our pensions since 1993, increasing by 6 percentage points of GDP allocated to fund our pensions. Six points of GDP in 2050, this represents approximately 230 billion euros. With an increasing wealth of our country from 1900 euros on that date, it would leave more than 1650 billion euros for the increase in direct wages, contributions to health insurance, public and private investments, the shorter work and even profits. There is one condition for this is that the profits do not capture most of the 230 billion that should accrue to retirees. Yet this is exactly the intention of the government and MEDEF Sarkozy. It is the aim of all the "reforms" of our pensions since 1993.
4. Lengthening the contribution period allows it to maintain the pensions?
No. MEDEF and the government deliberately lying. They say: "Either increasing the contribution period is the lowering the level of pensions. " In fact, employees have won one and the other since 1993.
Indeed, far from the world of abstractions which seem to delight Sarkozy, with a term of 40 years of contributions, the 2 / 3 of private sector employees who retire are not at work. They are either unemployed or in disease, or disability. With a passage of 41 years of contributions, more than three quarters of employees who find themselves in this situation when they retire. How when one is unemployed, illness, disability could possibly be able to choose to stay at work? It is a mystery whose government jealously guard the secret.
When the MEDEF, it is not a contradiction, it requires longer than 45 years of contribution period at a time when companies no longer allow young people to access a full-time work until about 25-30 years (in the best case) and where they lay off with all his employees over age 55 (or 50).
Under these conditions, extend the contribution period amounts to increasing the period of unemployment, sickness, disability and thus reduce the amount of pensions. Indeed, the service credited in respect of periods unemployment and illness or disability will obviously not be considered for the top 25 annual installments. It will then go back to the years prior to unemployment, illness or disability to find the 25 best years. But with the revaluation of wages taken into account in calculating the pension, depending on the evolution of prices and not wages, the amount of retirement will take quite a blow.
The average duration of a career in the private sector is less than 37 years. Decide under these circumstances, it takes 40 years of contributions to qualify for a pension full rate is lower in large proportions (with the system of discounts) the amount of their retirement. The transition to 41 years of contributions would further exacerbate the problem.
5. The maintenance work of employees over 60 years is there an answer to the problem of our pensions?
Plan for national employment senior employment 2006-2010 - which is in line with the Lisbon Strategy adopted by the European Union - has set a priority to reach an employment rate of 55-64 years from 50% in 2010. This goal is unacceptable for at least three reasons.
First, because it is intolerable to force workers over 60 years to stay at work. Do not confuse officials, professionals, business executives, academics who are fortunate to have a creative work and the vast majority of employees for whom work is above all tedious and painful, with increasingly stringent conditions, more and more harmful to their health.
Medef, right, and sometimes unfortunately also a part of the left based on increased life expectancy to conclude that it is normal working hours increases. They forget that at 35, a frame can expect to live 46 years and a worker 39 years. They forget that life expectancy in "good health", that is to say, without major disability is only 64.2 years for women and 63.1 years for men, according to a recent note INSEE.
Secondly, because those who advance this "solution" have an attitude of "specialists," an autistic attitude of isolating the problem as if he had any social interaction. Now, if we force hundreds of thousands of employees over 60 years working, there are hundreds of thousands of young people who will not find work. The persistence of mass unemployment does not, by itself, can accept this solution.
Finally, because the future is promised to older workers is all but paved with roses. Not only the working conditions deteriorate, suffering at work is growing, reaching more cruelly older employees. But in addition, to encourage employers to hire elderly people, the right has established "old job" of the CSD (Term Contract) 18 month renewable one time. So precarious that opens its arms to elderly employees. They are licensed to work full-time permanent contract (Contract duer undetermined) at 55 years old to be rehired, two and a half years later, part-time temporary contract.
To be sure they can not escape it, the Minister of Employment Christine Lagarde expressed its willingness to abolish gradually the exemption from seeking employment for unemployed people over 57 and a half years because, says she, with all humanity that characterizes it, at that age " it is not broke. " Let it be said, for Ms. Lagarde, it is time to retire when you're done for!
The figure (which we constantly rehash) of 38.1% is an overall figure for employment of workers aged 55-64 (in statistics, it was 64 years on the eve of his 65th birthday ...). It should however distinguish between the use of 55-60 years should increase as part of a widespread decline in unemployment and employment of 60-64 years which should be minimized. This is for employees between 55 and 60 years is needed before any "develop workstations" and allow access to training. The priority for employees of 60 years should be quite different: to enable all those who want to retire with full pension.
6. The system of "notional accounts" adopted by Sweden is there a solution for our pensions?
Francois Fillon has just declared that there was no question of calling the whole system of pensions flat. However, it is quite possible to doubt. Why, indeed, Sarkozy said he would have exactly the opposite ago 6 months, turning what should be a simple "route point" between the social partners and government in an "important meeting"? Why does the government have asked the NRC report specifically on the possibility of replacing our system with an annuity scheme in points or notional account [1] as in Sweden? The most probable is that the government did not want to wave before the regional elections of March and he expected that the congress of the CFDT is completed to leave your hands free to Francois Chereque [secretary general of the CFDT].
The 2010 report NRC published after the regional elections and we can count on the government and MEDEF into reading the blackest possible so, if employees leave her hands free to vote (as usual for pensions) a law in the middle of July.
For the ROC, the impact of adopting the Swedish system on the level of pension would depend on the parameters set by policy makers. For him, no system can, in fact, merely by virtue of the technique, to adjust the accounts balance. To regain balance, the NRC makers therefore refers to the "three levers "Traditional" level of resources, the level of pensions and the average effective age of retirement. "
Sweden has moved from a defined benefits scheme [primacies annuity] to a defined contribution plan [defined contribution]. Under the old system, employees were sure of their pensions, the contribution rate to balance the system adapts. Today, employees are assured that the amount - medium and long term - for their contributions. The amount of retirement depend on the evolution of payroll and life expectancy at the time of retirement. The government has, in principle, no political responsibility to take is the system introduced in 1998 that, once and for all decided to share the national wealth to be allocated to pensions. That did not stop to intervene when the shock is too large and could cause social response. Thus, with the recession and the decline in payroll in 2009, the pension would decrease 4.5% in 2010, the State has intervened to ensure that this decline is limited to 3%!
If life expectancy (Measured by the same tables as those of private insurance) increases, the amount of pension will fall, without, again, the government has any responsibility to make policy without any public debate. Each employee, alone in his corner, choose "freely" age of retirement, but with a gun to his head, that of a retirement that will not allow him to live if he leaves too early.
With this system, while collective mark disappears, and any collective demand also. It is true that the succession of cons-reforms since 1993 led today to approximately the same result: no one knows how much will retire in 10 or even 5 years. This is not, however, a reason to adopt a system as impenetrable as the Swedish system. It should, instead, to restore confidence in our retirement system division to enable the vast majority of employees to retire at the full rate at age 60.
In the Swedish system, as in the pension point so dear to the MEDEF is the entire career is taken into account in calculating retirement and not as now, the last 6 months in the function public or the best 25 years in the basic scheme of private sector employees. In both systems also, periods of maternity, unemployment, illness or disability are not intended to be taken into account. In total, the rate of wage replacement for retirement can only decrease. Solidarity has given way to the growth rate and mortality tables.
7. The right and the government have given up trying to impose our pension funds?
No, Medef recalls
constantly need to "supplement" the PAYG pensions by funded, that is to say, pension funds, whether or not "French." As to the right, his role is to oil the wheels to help Medef solutions to prevail.
In France, pension funds have taken the name of "retirement savings" to reassure employees. But this "retirement savings" has the same flaws as traditional pension funds. It is profoundly unequal. Only managers and some employees of large Companies have a real capacity to save. For the vast majority of employees, it is already difficult to make ends meet at the end of each month. And employers in abundant amounts so paid (2 billion each year) will add to initial inequality.
"Saving for Retirement" is deeply risky: it is willing to play his retirement in exchange for the funds collected are invested in stocks, and often shares as according to the "financial experts" who have an interest to encourage such investment, their performance would be better than bonds and bonds. But after the bubble burst of new technology in 2000 and after the recent financial crisis that has wiped out the retirement savings of hundreds of thousands of American workers, very few employees are in our country, ready to take that risk.
is one of the reasons for the decline in the PAYG is also important for the MEDEF. It will, of course, first, do not increase the amount of payroll taxes for employers and especially large groups can reap maximum profits. But he also wants the decline in PAYG to make room for pension funds "French" that are a challenge for insurance companies and financial capital. Leaving a field of hundreds of billions to pay indirect shared them completely unbearable. Over the PAYG will decline, more employees will be afraid for the amount of their future retirement and pension funds, despite all their faults, will be as a last resort for employees.
8. The reserve fund is there a solution for our pensions?
Created in 1999 by Lionel Jospin, the pension reserve fund should have a life of 40 years with a first phase of accumulation funds, from 2000 to 2020, and a second phase of use of funds, from 2020 to 2040 .
The first phase was to accumulate 1,000 billion francs (150 billion euros), most of which would come from the surpluses of the National Insurance old age, those of the Old Age Solidarity Fund and investment income from their investment. But for these funds have surpluses, it would have more resources for unfunded pension reform and repeal Balladur Veil-1993.
This has been done by either the left or the right course. It is therefore not surprising that the reserve fund has received only 35 billion euros before the financial crisis.
As to 330 billion francs (50 billion euros), which were the result of investment in stock funds accumulated, they are transformed, with the financial crisis, a loss of 7 billion euros. In total, the reserve fund has been accumulated 28 billion euros.
If he had been fed as desired by Lionel Jospin, This fund would, in any event, failed to address the need to fund our pensions. Indeed, used in 20 years, the 150 billion would have represented an accumulated flow of 7.5 billion euros per year. A stream of very distant actual financing needs of our pension system: 65 billion euros annually by 2050 if we let the reforms already put in place by the right full force and effect and 200 billion if one wants the net pension (average) return to 78% or 75% of net salary (average) as before the 1993 reform. That is why the fund had been presented as a mere "adjustment fund" to simply spread the increase in pension contributions over time in case of sudden increase in the number of retirees.
remains 10 years for this fund. It is not excess CNAV (National old age insurance) -10.7 billion deficit expected in 2010 - or the Old Age Solidarity Fund (3.9 billion euro deficit in 2009) that will enable to accumulate the 122 billion euros missing. Investments stock market will probably allow to accumulate a few billion, but these gains will inevitably transform into heavy losses during the next financial crisis. What is he? Feeding the reserve fund with the proceeds of privatization as some propose? That would go against the preservation and expansion of public services.
There is no miracle to expect from the Reserve Fund and it will find other ways to fund our pensions.
9. How to finance our pensions?
The deficit of the general scheme (old branch) should, according to government projections, to be 10.7 billion euros in 2010 after 8.2 billion in 2009 and 14.5 billion in 2013. The increased deficit was due in part to cyclical reasons: the economic crisis that reduced the wage bill and thus the amount of pension contributions.
But this explanation has a structural deficit evident: the stagnation of employer contributions for 30 years, then increases the number of retirees. In 2050, if these resources are not increasing and if we deny that the vast majority of employees find themselves in poverty, the need for funding of our unfunded pension will amount to 200 billion euros (constant) per year , 200 billion euros annually in a country whose GDP has doubled, it is 6 percentage points of GDP. Between 1960 and 2000 the share of GDP devoted to pension funding allocation had increased by 8 points, why is it impossible to grow by 6% between 2010 and 2050? Must still explain how the 6% could be mobilized.
The priority is to end mass unemployment. But this would not be sufficient to fund our pensions in 2050.
It would be then necessary to broaden the base of pension contributions by addressing niche social "is to tell the wage income that does not undergo any levy or a standard deduction of 4% for all social security contributions. The shortfall associated with the device association of employees in company performance is measured between 6 and 8.3 billion euros in 209 and, therefore, to double in 2050 if the income change at the same speed as the GDP.
should finally increase the rate of pension contributions.
Sarkozy, January 25, 2010 affirmed the need to "put everything on the table." He promised to review all tracks. Curiously, however, He has mentioned that "the prospect of a longer contribution period" and ever to higher pension contributions.
Yet in its latest report, the NRC found that "the positive effect of rising premium rates on the balance of the system is immediate and lasting." In its 2001 report, the NRC estimated that even with unemployment reduced to 4.5% of the workforce, it would still increase by 15 percentage points higher pension contribution to balance our pension schemes in 2040 and return a replacement rate of about 75% of salary (as before 1993).
Fifteen
point increase in 40 years (from 2000 to 2040 or 2010 to 2050), this represents an increase of about 0.37 percentage point per year. A rate of 0.25 point for employers' contributions and 0.12 points for contributions, this increase is obviously preferable to widespread poverty among retired · e ⋅ s promises that the continuous extension the contribution period. This option, however, were immediately excluded from public debate.
For employee · e ⋅ s, the dues increase would be offset by amounts that would go more pension savings fund and the return to a replacement rate of 75% of net earnings would reduce the use of family solidarity in favor of the elderly.
As employers, it was too high increase its pension contributions, he could always start with abandon to finance "retreats hats" of its leaders and alleviate all the money it spends to finance pensions . Veolia Environnement could, thus, saving 30.2 billion euros funded (and these are the provisions of a single year) to fund "retreats hats "Its Executive Committee, of which 13.1 million euros for the single" pension cap "its CEO, Henri Proglio.
The competitiveness of our country if it called into question by this gradual increase in the rate of pension contributions? Not if one replaced the "moderation" by the "fiscal restraint" and if the amount of dividends paid to shareholders decreased to compensate for the increase in payroll taxes. It is quite feasible. The amount of dividends paid to shareholders increased by 5.2 percentage point of GDP since 1982, to the detriment of wages. These dividends are unproductive and only serves to fuel financial speculation which we have seen the terrible effects. Lower dividends paid to shareholders would not affect productive investment and would not increase the price of goods or services invoiced by the company, despite the increase of pension contributions. The competitiveness of firms would not be affected.
10. What concrete measures to save our PAYG?
Our PAYG pensions are now seriously threatened. The continual decline in the amount of retirement, heavy uncertainty over the future of pensions are in the process of breaking the pact between generations. How the younger generations could she, in fact, accept that their contributions go to fund the retirement of the generation that no longer work when they themselves feel they will not receive retirement or pension schemes if their will not live?
For the younger generations have confidence in our retirement system division, they must ensure that they will have a proper retirement at an age (60 years) they will still hope to live healthy for many years.
This would require either a set of measures taken inseparable.
• First, repeal the reforms of the line since 1993 and require, by law, employers finance the supplementary pensions in the private sector so that this goal is reached.
• Ensure minimum replacement rate of 75% for a full career.
• Ensure that no pension shall be less than the minimum wage. [Minimum wage]
• Index the wage taken into account in calculating retirement and changes in the amount of retirement, once the latter wound up on wages rather than prices.
• Consider the time not worked due to maternity, occupational accidents and diseases, as well as involuntary part-time periods are worked full time and that is taken into account when calculating the retirement, the salary normally paid.
• Back to 37.5 years of contributions to be eligible for full pension as the duration true mean for a career will not exceed this figure. • Validate
study periods after 18 years as periods of seeking their first job upon registration at the employment center. [Servive public employment]
• Allowing employees who performed heavy work to take their full pension at age 55. This measure, however, does not relieve act upstream on the working conditions so that these works harmful to health disappear.
Only in this way can the confidence of younger generations in our system of PAYG pensions can be restored. Otherwise, it will be the door wide open to pension funds and misery for the vast majority of retirees in the decades to come.
* Gerard Filoche member of the National Socialist Party, labor inspector, a member of the Copernicus Foundation. ** Jean-Jacque Chavigni, co-author with Gerard Filoche SOS-Safely! Editions Le Bord de l'Eau.
1 , see About the "notional accounts" section of The Observatory pension http://www.observatoire-retraites.org/index.php?id=180 (Ed.)
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