FRANCE - A French government minister has conceded that sustainable funding for its current pension system “is not possible”. The admission comes after simulations exposed funding shortfalls facing the country’s pension system, despite proposed reforms.
In a paper published earlier this week, the Conseil d’orientation des retraites (COR) ran several simulations with the assistance of CNAV and ARRCO showing that proposed reforms would not be able to shore up the financial shortfall projected for 2050.
Éric Woerth, the minister for budget, public accounts, civil service and state reform, acknowledged the problem while speaking on national television. “The figures show that in reality sustainable funding of our pension system is not possible, due to demographic reasons,” he told Canal+.
Woerth added that the predictions did not take the government by surprise and that he would submit concrete reform proposals for discussion next week.
Proposed reforms include lengthening the contribution period, currently rising from 40 to 41.5 by 2020, as well as increasing the retirement age, at 60 lower than in many other European countries.
The COR projections show that even these measures will not be able to combat the looming pensions deficit, which is predicted to be €50bn by the end of the decade.
The news comes in the same week as President Nicolas Sarkozy ruled out any compulsory levies as a means of financing any pension reform.