The subject quickly found its way into the legislative campaign. And for good reason, it is the perfect revealer of the different social projects proposed by the three competing political blocs.
Unsurprisingly, the starting age therefore figured prominently in the debate between Gabriel Attal for the presidential camp, Jordan Bardella for that of the National Rally (RN) and Manuel Bompard for that of the New Popular Front (NFP), on 25 June on TF1.
In the Macronist camp, the Prime Minister repeatedly repeated that revisiting the 2023 reform, which increased the legal retirement age to 64, would lead to putting the retirement system « in bankruptcy » and to drastically reduce the amount of pensions.
Gabriel Attal relied on the scenarios of the Pension Orientation Council (COR) to assert that, without the reform, the system deficit would be even greater. Except that he forgets to specify that the COR does not foresee a slippage in spending, it highlights a lack of revenue. What his opponent, Manuel Bompard, did not fail to remind him.
The only one to comment on the figures and the calendar, the latter confirmed that once the NFP was in power, the reform would be repealed within 15 days after the election to return to a legal age of 62 years. He also recalled that a reflection would be launched on a return to retirement at 60 years old.
The big blur of the RN
Jordan Bardella has, as usual, cultivated vagueness. It must be said that at the beginning of June, the RN announced that retirement at 60, a long-standing promise of the party, was no longer the priority. Then in his program, disclosed a few days later, he promised « to repeal Macron’s pension reform and establish a progressive pension system”.
It is still necessary to master the concepts at the heart of the system: legal departure age (below which it is impossible to grant rights, which Gilles Bouleau, the presenter of TF1, did not seem to understand either); number of years of contributions required; full pension; progressiveness; or even pivotal age. This last idea was borrowed by Jordan Bardella from Emmanuel Macron, who wanted to implement his points retirement in 2018.
« I want to favor French people who started working early », declared the president of the RN. A worker who has accumulated 40 years of service could thus retire at 60. For others, “progressiveness” would be put in place. And Jordan Bardella continues:
« A person who started working at 24 years old, will retire at 42 contribution years, that is to say 66 ans. […] The record public deficit and the unprecedented budget deficit [me conduisent] to make choices ».
Contrary to what some commentators have said about these 66 years being “worse than the current system of 64 years”, this is the full retirement age and not the legal age of departure.
In the system imagined by the National Rally – which it estimates at 9 billion euros without providing details of financing – and which its leader was unable to explain, we must undoubtedly understand that the legal age (or pivotal age) would in fact be set at 62 years. It would therefore be possible to leave at this age, but with a discount if an employee does not have all the necessary quarters (i.e. 42, if we did not start early).
But the subject that brings Jordan Bardella and Gabriel Attal together is financial means. Each in their own way plays on the impossibility of touching the system due to lack of means.
There is still time to repeal
However, as we have already explained here, the financing of the retirement system is a matter of political choices.
Repeal the 2023 reform, that is to say return to a legal retirement age of 62, repair the social injustices that it induces with regard to arduousness at work but also for women by example, while ensuring the financing of the system, is far from being a mirage.
Doing it quickly is all the more relevant as it would avoid creating too many gaps between generations and limit costs.
« As the reform begins to apply, it does not yield much for the moment [la réforme ne commence à générer beaucoup d’économies qu’à partir de 2030, NDLR.]. So it wouldn’t cost much to repeal it today »specifies Simon Pierre Sangayrac, professor of economics at Paris-Dauphine and Science Po, expert at the Jean Jaurès Institute, who participated in the costing of the NFP program.
This would cost between 20 and 22 billion euros, according to calculations by Michaël Zemmour, professor of economics at the University of Lyon 2. Based on COR simulations, the age gap would represent approximately 0 .8 point of GDP in 2032, to which we should add 0.4 point of GDP deficit since the reform has not finished applying.
Increase contributions
To finance this repeal, several options are possible. One of the levers would consist of increasing social contributions which finance the pension system. The levels of increase could be discussed, but even relatively low, they would make it possible to raise the balance.
According to figures produced by the COR, an increase in the tax rate of +0.6 points, spread over five years, would be necessary to balance the retirement system in 2030.
« An increase of one point in contributions by 2030 would be enough to balance the system »indicates the economist Henri Sterdyniak, in a blog note.
Increasing contributions by 0.8 points by 2027 would represent 12 billion in revenue, Michaël Zemmour estimated at the end of 2022, who did the calculation.
Concretely, this would translate into 14 euros net per month in 2027 for a person on the minimum wage and 28 euros net for a person earning the average salary (2,574 euros in 2022), « by making the (extreme) hypothesis that the entire contribution increase is borne by employees and not by employers », he emphasized. Hypothesis which could be discussed since another distribution would be possible (for example two-thirds covered by employees, and one-third by the employer).
In its program, the New Popular Front proposes to increase social security contributions for employees and employers by 0.25 points per year.
« It is both very low and at the same time, it brings in quite a bit of revenue.analyzes Michaël Zemmour. In five years, this finances two thirds of the repeal of the pension reform at 62 ans. »
To supplement the financing of the system, it would be possible to seek other revenues: contributions to employee savings, for example.
“The inclusion of employee savings would bring pension schemes a contribution flow of around 3.5 billion additional euros per year »recalled the economist, in a previously published blog note.
Other economists suggest drawing on complementary health insurance, an option to which Medef is opposed, or even unemployment insurance: Henri Sterdyniak in fact mentions the possibility of taking the equivalent of 0.65 points of GDP from Unédic surpluses to finance pensions.
For its part, the New Popular Front proposes finding new tax revenue via capital income: 30 billion euros with a tax on superprofits (15 billion) and a solidarity tax on wealth (ISF) with a component climate (15 billion). With these different recipes, « the repeal of the reform would be completed without problem »further indicates Michaël Zemmour.
What about retirement at 60?
The step would be higher to finance a return to retirement at 60. But the NFP does not propose to return to it immediately. « If it were immediately, it would be very expensive and would create a big shock in relation to the ages »continues the economist.
« It’s a horizon, not something that will happen in the short term »specifies Simon-Pierre Sangayrac.
Discussed « to organize a conference with social partners to collectively determine the conditions for returning to the legal age of 60 years and the number of associated annuities with consideration of arduousness and occupational illnesses »writes the union of the left in its program.
Since Jean-Luc Mélenchon’s proposal during the 2022 presidential election, the measure has evolved. « In terms of annuities, it would probably no longer be 40, because it would cost 80 billions of euros, it’s unfeasible »continues Simon-Pierre Sangayrac.
« What is achievable, however, is a retirement at 60 years by discussing the number of years of contributions (41, 42, 43 ?) and with the rise in power of measures such as the grandfather clause. That is to say that we would spread out the reduction in the starting age over time, so as to smooth out the effects of a reform. »
To finance it, the NFP envisages an additional contribution on high salaries and, here again, a contribution from income which currently escapes the contribution (dividends, share buybacks, profit-sharing, participation).
To the detractors who accuse them of wanting « races free » in the words of Gabriel Attal, the authors of the New Popular Front program respond that it is possible to activate a number of levers to bring revenue into the coffers. A reflection which affects the entire social protection system and which is only just beginning.
