Jean-Michel Charpin presented his keynote report on France’s retirement system ‘Le Rapport Charpin’ before France’s most influential politicians, union leaders and pensions and investment chiefs, at the country’s seventh annual parliamentary colloque on social security at the Assemblée Nationale in Paris.
In a lively debate, Charpin called for a shake up of the debate on pension reform and he stressed this would have to happen before the baby boom generation of 1946 retires: “It is indispensable to begin spreading out any long term adjustments to the present system now, in order to avoid future generations accusing us of having procrastinated before taking any heavy decisions.”
The report also proposes increasing the duration of pensions contributions to around 42.5 years, falling short of a recommendation by France’s employer federation MED-EF to increase the limit to 45 years. “The generating factor behind the debate is relatively simple - the number of people over 60 is going to increase by 10m, from 12m to 22m between 1999 and 2040. The measures to take in response, however, will undoubtedly be complex, and this sort of debate is essential to this process.”
However, Jean-Luc Cazettes, president of the pensioners assurance board, the CNAV (Caisse Nationale des Assurances Viellesse), rebutted such ‘catastrophism’ on the retirement question, arguing that figures from the Charpin report showed France’s GDP (PIB) multiplying by 2.5% to the year 2040, coupled by only a meagre rise in the population - despite the different distribution levels in age classes. “Will we really be in-capable of facing up to the growth in pension payments from the country’s financial resources when we have coped with a doubling of the figure in the last few years? This alarmism is not acceptable.”
Jean-Christophe Le Duigou, secretary for retirement at French union CGT questioned the lengthening of the pensions contribution duration: “It has to be pointed out that employees are becoming older more quickly in the eyes of employers and being ejected from their careers at the age of 50. So the question of full employment during a person’s active life is crucial to this debate.”
Chris Daykin, the UK government actuary, warned the colloque: “The role of funded supplementary pension schemes in boosting capital markets explains the enthusiasm for such systems in Europe at present. However, it is not certain that complimentary capitalised retirement schemes do have a favourable effect on the market, and some economists have put forward strong cases against them. Un-doubtedly though, funded schemes will play a greater role in the future - even if some countries don’t take the necessary steps in this direction.”
Jérôme Cahuzac, parliamentary deputy for Lot and Garonne, and author of the Rapport Cahuzac on pensions, pointed to the issue of pension funding as the future retirement solution. “I don’t see why these products should not see the light of day in France, particularly as we have created a reserve fund to cope with proposed future contributions increases.
“All we have to do is address the three main faults exposed by the Loi Thomas; namely the lack of individual obligation, the overreaching role of social partners in controlling the funds, and a need for fiscal or social incitements to attract employees into contributing.” Hugh Wheelan

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