In the current debate on pensions, there are too many caricatures to have an

opinion. Everyone wants us to believe that there is no solution, but one,

which for the opposition party means taxes and for the government delaying

the legal age of retirement. In fact, each of these solutions are only one

among others, and each weighs particularly on some French people. Let’s try

to summarize the issues clearly.

1. Retirement funding distribution is provided by taxes and by contributions

of the working population, which was 4 per retiree in 1960 and only 1,7 now

and will be down to 1.5 in 2020.

2. The average life expectancy in retirement has increased from 8 years in

1981 to 13.7 years in 1982, and 19 years today. At the current rate and

without changing the law, this expectancy will exceed 21 years in 2020;

lifespan in retirement will eventually exceed the remainder life spent

studying and working.

3. In these circumstances, the pensions deficit, which is 32 billion this

year, will rise to 45 billion in 2024 and 102 billion in 2050.

4. Funding for this additional cost can be achieved by an increase in tax or

contribution, which would represent each year ten or so Euros per month for every

citizen.

5. If we decide to fund other than by taxes, for not adding to it, or not to

put the capital to contribution, or because it will be needed to reduce

another part of the debt, we can decide a contribution in the form of work,

which amounts to delaying the retirement age.

6. There are two main ways: increasing the legal age or the length of

contribution. According to the calculations of a great French demographer

Hervé Lebras a postponement of one year will save $ and $ 1.5 billion each year thereafter. While one year increase in the

number of years of contribution will save $ 5.3 billion the first year and

$ leads to a strong increase in the proportion of people said to be in “long

career,” forced to work beyond the legal age because they started early (70%

per generation instead of 50% today) and the average number of years worked

beyond the statutory 40 years (1.5 years on average for the whole population

and 2.1 years for those who work beyond the legal age). On the contrary,

increasing the contribution period reduces the proportion of long careers

that rise to 30%, or 0.3 years on average overall and one year for those who

must stay at work beyond the legal age because they started late.

So if we increase the legal age, those who began to work very young, without

schooling, will pay more, if we increase the contribution period, it is

those who started late, because they had to study, who will bear the burden.

Among funding by the capital owners, workers or managers, the government

seems to have chosen. It has this right. But it cannot say that its choice

is the only possible one. Especially since it will probably use all these

means at the same time, given the magnitude of the problem, in proportions

that will show which classes each majority favors. It is the honor of

politics to do so clearly.