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France's pension scheme would remain in need of financing until 2036

The regime would return to equilibrium in 2036 after financing needs in the order of 0.4 percent of GDP in 2026 and 2030.


Devdiscourse News Desk 12 Jun 2018, 08:13 PM France
  • Emmanuel Macron wants to undertake in 2019 a broad reform of the pension system to unify the 42 existing plans. (Image Credit: Reuters)

The pension scheme of France would remain in need of financing until 2036 in the best of scenarios, according to the annual report of the Council of the orientation of pensions (COR) that Reuters was able to consult Tuesday.

In the short term, the financial balance of the plan would remain negative regardless of the growth scenarios of the activity revenues envisaged (1.8 percent, 1.5 percent, 1.3 percent or 1 percent), according to the latest projections of the board which Reuters had access to. They will be officially presented Thursday.

The regime would return to equilibrium in 2036 after financing needs in the order of 0.4 percent of GDP in 2026 and 2030, according to the most positive scenario (1.8 percent growth). In November, the COR advanced a possible return to equilibrium in 2037.

In the 1.5 percent growth scenario, the financing need would increase at the beginning of the period to 0.4 percent and 0.5 percent of GDP in 2025 and 2035. 

In the other two scenarios, the "pension system would remain permanently in need of financing".

According to the national secretary of the CFDT in charge of pensions, Frédéric Sève, "there is nothing to be alarmed". "The context is calm enough for structural reform," he told Reuters.

"The population continues to age, so there will be funding needs, but spending is not drifting like it was 50 years ago."

Emmanuel Macron wants to undertake in 2019 a broad reform of the pension system to unify the 42 existing plans. The high commissioner appointed to pilot the device, Jean-Paul Delevoye, believes that the period is favorable because the regime is sitting, according to him, on a balanced basis.

The gross expenditure of the pension system was valued at 316 billion euros in 2017, or 13.8 percent of GDP.

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