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“There are other ways to reform pensions”

editor by editor
January 19, 2023
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Final month, the centre-left suppose tank Terra Nova revealed, underneath the pseudonym Fipaddict on December 22, 2022, a Remark criticism of presidency initiatives and proposed one other path. With out denying the necessity for a restoration of the system’s accounts, its managing director, Thierry Pech, considers that the present undertaking lacks equity. Specifically, he believes that no effort has been requested of firms and retirees who can afford it.

Was this reform needed?

Reform was wanted. If we take a look at the projections of the Pensions Orientation Council (COR), that are primarily based on essentially the most affordable assumptions (labour productiveness growing by 1.three% per 12 months, unemployment of round 7%, and many others.) , we’ve got a pension system deficit of zero.6% of GDP in 2030, a gap of 16 billion euros per 12 months.

So those that declare that the COR projections usually are not alarming are blindsided?

Clearly. Solely one of many COR situations avoids a deficit: a pointy rise in productiveness, a pointy drop in unemployment, upkeep of the State’s contribution to public schemes at a really excessive and troublesome to justify stage… Suffice to say that it is vitally unlikely. And even on this situation, equilibrium doesn’t arrive till 2039 or 2043: within the meantime, we may have amassed sixteen to twenty years of deficit. A deficit which ought to itself be coated by money owed, resulting in monetary prices which might overwhelm the boat. It’s legit

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