The debate on retirement pensions in France is much deeper than the current ongoing debate on the need to harmonise special pension regimes. The debate is related to an infinitely broader problem, the rise of median age globally. And this issue cannot be avoided forever.
Indeed, all over the world (except, now, in the United States) life expectancy continues to increase at a high rate, because of the decrease in infant mortality, general improvement of living and eating conditions, and increasing efficiency of health systems. In France in particular, life expectancy has increased from 2.5 to 3 months per year over the past forty years; and it is now ten years higher than it was in 1981, when the retirement age was set at 60.
Additionally, as the birth rate continues to fall almost everywhere, elderly folks constitute a majority of the population and may require greater and greater retirement benefits for longer and longer periods of time, to the detriment of those who are actual participants in the workforce and those who are being trained to enter the labour market. Instead of funding the future, we are funding the past, much to the great misfortune of societies.
This cannot continue as such; it will not be possible to simultaneously maintain the level of tax contributions for retirement, the amount of retirement benefits, and the retirement age. Some of these variables will have to evolve.
Increasing the tax on retirement contributions, whether private or public, is unlikely to be accepted at a time when taxes and social charges have reached record levels.
Furthermore, it is not possible to decrease retirement benefits, except perhaps for the very high-income earners, who have already built up capital.
Increasing the number of migrants, so that they can fund our pensions through their work, is even less possible: to maintain the current ratio between contributors (adults aged 20 to 60), and retirees (people over 60 years old), it would indeed be necessary (according to a 2001 United Nations report) to welcome in France each year 1,100,000 new migrants; which is all the more absurd because these migrants will one day become retirees, and more and more migrants should therefore be welcomed to fund the pensions of their predecessors!
The remaining issue is whether to increase the statutory retirement age. It is inevitable; and France will not escape it, except of course for those who have to perform hard labour, and who should be able to leave earlier than today. For example, it could be decided that every five years, statutory retirement age would automatically increase by one-third of the increase in life expectancy over the same period.
In a very real sense, this is the topic that we should start debating today, because it will not be an easy choice. And public opinion is not ready for this.
It will be even more difficult in emerging countries that will age before they have been able to set up pension systems, almost non-existent in Africa, and embryonic in India, China and South Asia.
We will have to go even further. As medicine shows that a rewarding activity is necessary for health, it will be necessary to create the conditions so that those who leave (with a decent retirement pension, a healthy body and mind) their last paid job, still contribute to society, in their own interest. And to do so, it will be necessary to encourage them, including financially, to participate even more than they do in civic and associative life, and to create new professions, systems of accompaniment and transfer of knowledge.
Finally, we can dream of a world where work will have become so exciting, so free and liberating that many people, competent and useful, will no longer want to retire, even beyond the statutory age. Society will then be completely reorganized. It has begun. If we prepare ourselves well for this, it can be tremendously liberating for everyone.
j@attali.com