Law Fillon (retirements)

The “ law Fillon on the retirements ” (law n° 2003-775 of the bearing August 21st, 2003 reforms retirements), is a reform of the Régime of the retirements basic control in 2003 by Francois Fillon, then Ministre for the social Affairs. That does not relate to the supplementary pensions nor the retirements frameworks but the retirements relating to the share of the incomes lower than the ceiling of the Social security (the section A). In 2007, section A. Its political tendencies include a lengthening of the duration of contribution, incentives with the activity of seniors and the installation of an individual system of Retirement by capitalization, PERP. Having caused an important social movement in 2003, she is still criticized today like having been insufficient to ensure the perenniality of the system.

Context of the reform

; A short history

The Retraites in France developed first of all in certain branches of activity and unquestionable large Entreprise S as of the interval wars before being generalized with the whole of the population within the framework of the ordinances of the Social security in 1945. The retirement scheme instituted on this date is based on the principle of intergénérationelle solidarity through a system by distribution. In 1945, the duration of contribution is only 15 years (then to 30 years as of 1947 passes). In the same way, the starting age to the retirement is fixed at 60 years but the rate of replacement i.e. the relationship between the amount of the first monthly Pension poured and the last Salaire, is fixed ata low rate. Into 1967, ordinances divide the general scheme of the social security into 3 branches; the retirements of the employees now depend on the National bank of the old-age insurance of the employed persons (CNAVTS). In 1972, to benefit from a retirement with full rate one needs cotiser now 37,5 years (Gouvernement Georges Pompidou). In 1973, the supplementary pension (for the employees of private) is generalized and becomes obligatory. In 1982, François Mitterrand lowers the starting age to the retirement at 60 years instead of 65 years for a full rate with 50%. In 1991 leaves the White paper ordered by Michel Rocard, it will be used as a basis for the reform Balladur of 1993. In 1994, the Loi Madelin makes it possible 2 million free lances to capitalize for their retirement. The Fonds of concerning the retirements is created in 1999 and the Conseil of orientation of the retirements in 2000.

; The French retirement scheme

There exist two great types of Régime of the retirements in France: the general scheme and the special diets . The general scheme is addressed to paid the private one. As it ensures at most only 50% of the Salaire gross, this retirement is supplemented by obligatory complementary modes (whose principal ones the AGIRC and the ARRCO are ). The special diets address to the civils servant, with paid large State enterprises (example: EDF/GDF) like with the Craftsman S, Trading S and Farmer S by the means of autonomous cases. The retirements in France are organized according to the principle of intergénérationnelle solidarity, i.e. the pensions of the current pensioners are paid by levies on the active; part of the National insurance contributions are versed with pension funds which themselves will remunerate the pensioners proportionally by their duration of contribution and obviously proportionally by their income of activity. The employees while cotisant offer themselves in a certain way of the rights for their own retirement. The general spirit of this system is thus to recognize with reprocessed the right to be unproductive after having been it during all their working life. It thus is not of a principle of assistantship to the elderly but about the shape of insurance of the employees. Nevertheless, the elderly who did not cotisé enough during their working life perceive minimum wages, the Allocation of solidarity to the elderly.

; Measurements before Fillon

Starting from the White paper ordered by Michel Rocard in 1991, Edouard Balladur reform in 1993, the general scheme (that of paid the private one); three great measurements are taken: the lengthening of the duration of contribution to profit from a retirement with full rate passes gradually from 37,5 years to 40 years. The average Wages of reference, bases calculation of the Pension is calculated over the 25 best years and either on 10 best. The revalorization of the pension will be done starting from the trend of prices and either starting from the general evolution of the wages. The project Juppe fails in 1995. He wanted to extend to the public office Balladur measurements. Lionel Jospin organizes opening of negotiations on the retirements of the public office which are closed again at once. Reserve funds for the retirements is created. Its objective is to accumulate 152 billion euros from here at 2020 by exceptional receipts (surplus of certain branches, receipts of privatizations). The Conseil of orientation of the retirements (HORN) is created in 2000. Laurent Fabius creates the Plan voluntary salary savings giving right exemptions Fisc ales.

Many reports/ratios of experts are written starting from half of the Années 1990 at the time when problems of financing and an evolution worrying Démographique are anticipated.

; The time of the expertise

The report/ratio Briet (1995) in the name of equity enters the generations, requires the lengthening of the duration of contribution. The report/ratio Charpin (1999) request the lengthening of the duration of contribution at 42,5 years in order to solve the problem of the massive increase in the financing needs whose paroxysm will be the year 2040. The report/ratio Teulade (2000) relativizes the problem of financing by basing on very optimistic assumptions economic S. The report/ratio Taddéi (2001) recommends the installation of a system of “selected and progressive Retraites”.

Reasons of the reform

The reform Fillon (or “Counter-Reformation” according to its opponents) is justified according to her authors by four reasons for nature Démographique, Social, budgetary Fiscal and . These reasons will determine the orientations taken by the Loi and will imply strong rehandlings with the current system. The official will is always however to preserve the principle of the distribution as bases financing of the Retraites.

; Reasons:

Reasons Demographic S:

From its basic principle, the current system must be reformed so as to be able to accompany the nearest arrival at the age by the retirement of the generations resulting from the Baby-boom. Indeed, this substantial reduction of the Active population will modify the report/ratio number of credit/number of inactive which would thus pass from 2,2 in 2002 to 1,5 in 2020. This effect “scissors demographic” is the subject of a Consensus. Officially, without reform, “the financing need is estimated in 2020 at 43 billion euros per annum. ” It is this same reason which was partly at the origin of the reform Balladur of 1993. In addition, the government Raffarin decided to use like lever of reform the lengthening of the duration of contribution, which seems to him all the more justified since the Life expectancy will increase on average by 6 years between 2000 and 2040.

Social Reasons .

The reform must be the occasion to correct the inequalities of the system. According to Francois Fillon, it is a question “of finding the spirit of 1945”. This reason will be used as springboard to align the duration of contribution of the civils servant on that of private while exploiting the concept of equality. In addition, the voted text wants to guarantee suitable Pension S with the modest Salaire S and the workers of long life, with also the introduction of the indexing of the pensions on the prices and either on the wages. The Gouvernement also will take this reform like a means of changing “the perception of the concept of work”; he thus seeks to reinforce the place of work in the institutions forming the bonds of the company. Lastly, the reform wants to give a new place to the Managements and labor in the future debates, on the modifications of the system programmed right now.

Reason for the retirement to the chart

The reform must make it possible to give “more freedom and of flexibility” to the future pensioners. It is a question of leaving more place to the individualistic system of the Retraite by capitalization in the line of the partnership plan of voluntary salary savings of Laurent Fabius. In addition the pensioners have more important margins in the Loi insofar as they can repurchase quarters, 12 at the most under their years of higher learning and to work beyond the authorized limit (with a surcote, to support the activity of the seniors).

budgetary Reason : to guarantee the financing of the reform

This part presented by the law shows the funding sources that the Gouvernement will mobilize to finance the reform and to fill the financing need. This financing need is estimated at 43 billion euros: the reform must allow a final balance of 18 billion is 46% of the total. The government will supplement this first balance by a rise of the contributions old age in particular in the public office starting from 2006. The remainder must be financed by a fall of the rate of Chômage to 5% from here 2020 is a saving envisaged in 15 billion euros.

Chronology of the reform and involved forces

; 2003, the year of the reform

Francois Fillon, Minister for the Social Affairs in 2003 in the government Raffarin, is thus charged to organize the reform of the Retraites. It thus will work out a precise timetable with for objective making adopt the reform end June 2003. The reform will be well adopted but a social movement of great scope will disturb the governmental calendar. All however starts as envisaged. Francois Fillon after being itself interested in the various modes in Europe during January, presents for the first time contours of the government project the February 3rd 2003. February is completed by the meetings of the Minister with the whole of the Managements and labor. The five trade-union organizations considered as representative (CGT, CFDT, CFTC, FO, CFE-CGC) and the MEDEF are thus consulted, the Minister wanting to know the various positions. The Minister communicates mid-April to the trade-union organizations “the broad outlines” of his reform. April 24th constitutes a turning: Mr. Fillon confirms the great principles of his reform during the emission 100 minutes to convince where he proclaims in particular that its reform is “the only possible reform”…

; An important social mobilization

This report is shared per none the French trade-union organizations except notable for the MEDEF: the Grève S burst. The UNSA, the G10 Interdependent, the FSU unites with the CFDT, the CGT, the CFE-CGC, the CFTC and with FO at the time of a unit strike movement which will gather the May 13rd 2003 between 1 and 2 million demonstrators. Meanwhile, the Prime Minister Jean-Pierre Raffarin declares: “It is not the street which controls! ”. The following day, after several hours of negotiation with the Managements and labor, the proposals of the Minister satisfy neither CGT, neither FO, nor CFTC. The three trade unions leave the table of the negotiations late in the evening. But the discussions will continue throughout the night, between the remaining Minister and the two trade unions. They will lead at the dawn of May 15th to the signature of the agreement by CFE-CGC and especially by CFDT. The trade unions not signatories, UNSA, G10 Interdependent and FSU call at once with a unit gathering on Sunday, May 25. They are joined by various sections of CFDT, dissatisfied with the agreement. Between 300.000 and 600.000 people express in Paris. The Grève S continue the following weeks around increasingly radical positions (“37,5 annual installments for all”): the strikers are less and less numerous with the wire of time but in certain sectors (education, transport…), the mobilization has much evil to weaken.
Other side, partisans of the reform also mobilize themselves, on the initiative of associations close to the liberal ideas like Most cherished liberty: Sunday June 15th, 18.000 to 150.000 people express (respective estimates of the police force and the organizers; Le Monde speaks about 30.000 demonstrators); the width of this demonstration in favor of the reform surprises, the preceding ones having gathered only a few hundreds of people. Those are asserted as being the representatives of the “silent majority”, which would approve the reform and which would undergo the “privileges” and “ceaseless strikes” of the opponents to the reform.

Mid-June, the project is presented to the the Council of Ministers. In same time, the trade-union tergiversations destroy the desires of “general strike” of a good part of the strikers. The debates with the National Assembly begin at the end of June. In spite of the deposit by the parliamentary left of multiple amendments qualified by the parliamentary Government of Obstruction, the Fillon reform is adopted the July 4th 2003 by the Palais Bourbon. The Sénat makes of it in the same way the July 18th 2003 before the Constitutional council does not endorse the Loi completely.

; Involved forces

During the debate on the reform of the Retirements, of the trade unions, the political parties, the personalities but also of associations made a point of giving an opinion. With some exceptions, these positions all can be classified in one of the four categories that Michel Husson constituted in its book the Breakers of the Social state . The first category is consisted the unit of the positions that Michel Husson qualifies “liberal ”. The National insurance contributions are considered to be “already too high” by holding of this position which want to exploit the duration of contribution to ensure the financing of the retirements. Even if holding them of this position see in the individual saving and the Capitalisation a means of supplementing its retirement, they say for the majority to want “to save the system by distribution”. This expression of Francois Fillon is capital for the continuation of the analysis: the term “to save” indicates that holding them of this position judge the mode by distribution in “danger” and this is why they want to reform it. The “liberal” position is in the four categories to only make this diagnosis. Holding of this position are of course Francois Fillon, Jacques Chirac, the UMP but also the UDF and some Socialist personalities like Michel Rocard, Bernard Kouchner or Jacques Delors. It should be noted that the MEDEF is him also favorable to this position but it wishes to push even further logic (47,5 years of contribution). Even if the CFDT and the CFE-CGC dissociate some partly holding radical of this position, they can by their adhesion with the project Gouvernement Al only be classified in this category. The second category is baptized by Michel Husson “position reformist or of compromise”. She proposes a scenario in which the mode by distribution would be only financed by a rise of the national insurance contributions. She is defended by certain economist S French like Thomas Piketty or Jean-Paul Fitoussi. Comes then the “reforming” position defended by the Communist party (PC), the CGT. and part of Attac. To supplement or modulate the calculation of the contributions, holding them of this position propose to mobilize new funding sources.

Lastly, the Fondation Copernic proposes a “radical” position where the retirements by distribution would be financed by a displacement of the Partage of the added-value in favor of the employees. This displacement would be obtained by a rise of the employers' national insurance contributions. The Greens are them also rather accordingly.

It is necessary to note the somewhat atypical position of the Socialist party which envisages to finance the retirements by a rise of the contributions but in block a lengthening of the duration of contribution for some does not disavow paid. (See Proposal for an abrogation in the conclusion)

Contrary to the vocabulary says “liberal”, the vocabularies of the steps “reformist”, “reforming” and “radical” do not translate really a “concern” with respect to the “shock Démographique” which “would threaten” the mode by distribution. This system is not according to them a “problem”; it appears capable being financed “in the worst case” by a rise of the contributions. On the countable level, the reform almost represents according to them a simple adjustment. In this optics, “to save” the system by distribution is not with the day order, it just acts to do it perdurer. Lastly, these positions rather tend to assert a return to a mode by high level distribution (“37,5 annual installments for all” and maintenance of the Pension S on a good level) and the Abrogation in the long term of the “Loi S Balladur - Fillon”.

Main features of the reform

In order to allow a rebalancing of the system, the reform put on a lengthening of the duration of contribution is 40 years in 2008 for the civils servant thus aligned on the general scheme (however their retirement is calculated on the last 6 months average whereas for the general scheme it is calculated on the 25 best years average). The duration of contribution will gradually lengthen for the whole of the active at 41 years in 2012. Moreover, the Loi binds this duration to the profits of Life expectancy in the next years. It is about the flagship measure, the lengthening of the duration of contribution like lever being a point particularly disputed.

the Pension S are indexed on the prices and either on the evolution of the Salaire S. Francois Fillon explains this measurement by a need for Social justice in favor of the pensioners (“Justice finally for the pensioners whose Purchasing power will be guaranteed through the indexing on the prices” F. Fillon, intervention with the Senate). In the level of the pensions, the Managements and labor and the Gouvernement meet at least every three years to formulate proposals which must nevertheless take account of the economic situation country and financial health of the modes.

a set of measures is founded in order to support the activity of the seniors with the system of surcote/rebate (increase of 3% of the pension per additional year for the surcote, decrease of the pension when the number of six-month periods is insufficient, the rate of rebate being fixed at 5% in 2008), of measurements facilitating the progressive retirement (office plurality employment/retirement) and hardening the conditions of granting of Pré-retraite S.

the Plan of saving for the popular retirement (PERP) is created. It is about an individual system of Retraite by capitalization, together with an exemption of Impôt S on the payments. It makes it possible to aim to the constitution of a Life annuity, which will be liquidated at the beginning of the retirement.

In complement, a new plan of salary savings was creates, the Plan of saving reprocesses collective (PERCO). Supplied with the Undertaken S, of frankness from loads and taxes, and their employees, it offers even more flexibility and advantages Fisc to.

Since the 1^er January 2004, the agricultural employees, employees, farmers, craftsmen, tradesmen, liberal professions and lawyers can obtain a retirement with full rate as soon as they obtain the necessary number of quarters and that without waiting 60 years in the conditions of having validated at least 4 quarters before 17 years. Complementary modes ARRCO and AGIRC (only the section B) are aligned on the basic mode and grant full rate under the same conditions (agreement of November 13rd, 2003). This measurement, temporary, largely used, will end at December 31st, 2008.

On the model Swedish of “the orange envelope”, the regular information of the credits - whatever the modes of retirements to which they cotisé - becomes obligatory. It is on the one hand about quinquennial information pointing out all the known periods of contributions (the “statement of individual situation”) and on the other hand of the estimate of the entire amount of the retirement according to the age of discontinuance of business (the “total individual estimate”). The first years will receive these layers as of 2007. This measurement - extremely complex to implement - is with the load of the thirty-six modes of retirement concerned.

Critics of the diagnosis and measurements by the social actors

The social actors ridden to the crenel against the reform project denounce weaknesses and perverse effects which are according to them anchored in the project. Criticisms result from the world Politique (opposition), trade-union, university (Enquiring S, economist S, sociologists) and associative (ATTAC, Fondation Copernic…). These criticisms are gathered insofar as they show a certain homogeneity, excluded the positions of certain social actors whose behavior during the reform was clarified above (in particular the CFDT).

Criticisms of the official arguments

the Demographic impact

Although the impact of the arrival at the age of the retirement of the generation of the Baby-boom is important and undeniable, its weight on the economy must be relativized. Indeed, the principal argument of the Gouvernement carries on the active number report/ratio of /nombre the inactive ones which will strongly decrease as from 2012. However, this relative weakness of the report/ratio will be compensated by a increased Productivité. Indeed, by the means of human factors (transmissions of knowledge, new organizations,…), technological, and social (human relations on the work place,…) the productivity of the workers does not cease improving each year. These productivity gains are relatively high in France thanks to a formation and a university research of quality.

the Social justice

One of the reasons for the reform is the correction of inequalities which the system would generate, in particular between the employees subjected to the treatment of the public office and those subjected to the general scheme . This argument, widely used and diffused to create dissensions within the social movement, is since these inequalities of treatment result from the preceding reforms. For example, the introduction of a rebate for the civils servant with the reform returns perfectly in this logic. In a real preoccupation of social justice and an equality, it had been logical to reform the two modes under the same conditions.

financing suggested

At first sight, the Fillon reform is financed to 100%, in various ways since a part is financed by a rise of the contributions starting from 2006. In that, the inescapable character of the Fillon reform imposing itself as the single solution to safeguard the system, appears justified. The problem is that this financing rests on dubious bases, that it is on the level of the incomes or the level of the services.

The most problematic assumption and most dubious is that of the Unemployment rate which must range between 5 and 6% to allow a saving in 15 billion euros. This estimate of the level of long run is dubious; the short-term fluctuations around this value depend on the international Conjoncture. A contrario others critical which relativize the need for the reform, an undervaluation of the unemployment rate of long run would have masked the problems of financing; would have then “to be hardened” the Fillon reform.

An essential aspect of the Fillon reform can be put in prospect here: conscious of uncertainties which always plane after its reform on the financing of the French retirement scheme, old the Ministre for the Social Affairs envisages meetings with the Managements and labor every five years to adjust certain points of its project of financing.

The lengthening of the duration of contribution

a possible lever “to save” the distribution

The Fillon reform has as a consequence a lengthening of the duration of contribution to be able to profit from a retirement with full rate. This lengthening is certainly a possible lever to maintain the balance of the distribution but it is criticizable, always according to the opponents on several points.

; A later effective departure

One of the first effects of this measurement is the fact that the effective starting age to touch a retirement with full rate becomes increasingly high for the individuals who return tardily on the Job market. A student entering the Working life in the 25 year old neighborhoods and cotiser during 42 years to touch a retirement with full rate, will be in retirement at 67 years. Thanks to this case, it is possible to put in prospect problems very little approached in the public debate. The Life expectancy will make it possible to work up to 67 years, but the question of knowing if the gained years of life expectancy are used to work or to release from time for oneself, can be posed.

; The problem of the Unemployment and weak the Activity ratio of the old workers

The lengthening of the duration of activity seems to be a solution in contradiction with the evolution of the Job market. Indeed, it is requested from the people to work longer whereas them offers of stable jobs are done rare . Unemployment rate is high for the credits moreover 55 years. Nevertheless, it is not the case in the other countries, which could show that a “change of mentality” is possible. The Fillon reform aims at the increase in the activity ratio of the seniors. However, measurements seem not to be with the height of the stake contrary to those taken in Finland and with the Netherlands. These countries took measures to increase the activity ratio of the seniors. These measurements are characterized for example, by a redefinition of the working time throughout the life or a reorganization of work. The effects of these measurements can be already made feel in Finland with an activity ratio of the 55-59 years which passes from less than 50% in 1997 to 59% end 2000. This favorable evolution was made possible by the joint will of the Managements and labor to be mobilized for the employment of the seniors even if the activity ratio of more than 60 years remains weak (23%).

The fall of the Pension S

; The indirect fall by the lengthening of the duration of contribution

The conditions of obtaining a pension with full rate are made more difficult of access when the duration of contribution is increased. Indeed, whereas only 45% of the men and 42% of the women are still in activity the day before their retirement, to apply a rebate for each year of missing contribution will sometimes strongly reduce the pensions of some reprocessed. Since the effective starting age to the retirement high risk not to increase for various reasons (exposed in the 2 of part 3), the rebate (certainly less) risk not to improve the level of the pensions, even cause to drop it. That is all the more true for certain categories of employees.

Thus, in the Private sector, the guarantee of employment is weak especially for the employees of more than 50 years. This category of active suffers deeply (put in Pré-retraite, lay-offs…) report according to which the employers seek more and more to have a young manpower; thus, like says it JM Toulisse, “It is not more the Loi which fixes the age of our retirement, it is the Entreprise which decides”. Indeed, it is little justifying and especially difficult for more than 50 years laid off to find an employment on the Job market whereas it knows that he is close to the retirement. The level of the pensions will be made some feel at the retirement age. The most 50 years are touched by the lengthening of the duration of contribution but it is not only.

Indeed, the precarious employees will see their pensions decreasing in a very important way because on the one hand they touch weak incomes and idle periods connect during which they do not cotisent. Lastly, the women will be they also victims of this policy for various reasons. The careers of the women at the same time shorter, are split and marked out of Salaire S in general, lower than those of the men; all miser on a lengthening of the duration of contribution thus certainly will not help to reduce the Discrimination S which the women with respect to their retirement undergo.

; A progressive fall by the indexing on the prices

But it is especially the indexing on the prices and either on the general evolution of the Salaire S which will indeed reduce considerably the general level of the Pension S., because of the profits of Productivité shared with the employees, the evolution of the wages is better than that of the general index of the prices. It was noted that after the reform Balladur, the level of the pensions of paid the private one decreased in an important way (about 10% on average). By projections of the Statistical institutes, it is probable that this indexing on the prices confirmed by the reforms Seam-Balladur will lead to an increasingly progressive fall of the pensions, and who could reach in the long term, 20% for the public and 27% for the private one.

; An incentive the saving

The fall of the Pension S will force many employees to have recourse to forms of saving reprocesses to supplement their amputated pensions. The probability of witnessing an increase in the inequalities between reprocessed (between those which could put money of with dimensions and those which could not it because of too weak incomes) is very strong. For example, a person touching SMIC will be able to save with difficulty for her retirement since it will have other priorities, in particular the health expenditure. Indeed, how a person who has already evil to provide for her own needs would be only in term of primary education needs (food, housing, health, education…), could it save for its own retirement?

It is part of the redistributive aspect of the system which is put at evil. Not only the inequalities between reprocessed and active will increase (in particular by the indexing of the pensions on the prices), but those between the pensioners themselves also will probably know a strong expansion.

Proposals of the social actors

The rise of the contributions

; The refusal of principle of increasing the national insurance contributions

The rise of the contributions is a lever making it possible to finance the Retraite by distribution. Government has drawn aside this assumption, asserting, in any liberal logic, that an increase in the contributions would induce an increase in the labor costs which “would put in danger the competitiveness of our economy, i.e. employment” (Francois Fillon). The government thus presented the lengthening of the durations of contributions like an inescapable measurement, by refuting any form of alternative. However, the argument of the weight of the social contributions is discussed by the opponents with the project: the liberal analysis appears far away from reality, because of 20 years of application of these doctrines in France by the right governments and of left for a not very glorious assessment according to the opponents . The liberal analysis of the Job market is scientifically based on very disputed theories . The alternatives stated thereafter do not fit in the logic of the government, they propose, contrary to this one, to increase the contributions to be able to finance the Retraites. They tend to propose the Abrogation reform Balladur, the maintenance of the level of the Pension S and a duration of 37,5 years contribution, even 40 years for all.

; To increase the national insurance contributions is possible

The objective of this scenario is the maintenance of a rate of constant replacement i.e. the level of the Retraites would evolve/move at the same rate/rhythm as the Salaire S. the share of the wages in the Added-value is supposed to be constant. It is the increase in the Productivité which allows a growth of the Purchasing power. Each person can receive more richnesses because each person produces more richnesses. The pensioners are entitled to a share of the richnesses created without taking part in their production. If the number of pensioners increases more quickly than the number of participants in the production then part of the productivity gains is absorbed by this evolution Démographique. This phenomenon is called the equivalent-productivity and it is estimated at 0,5 point per annum (according to an always relevant analysis of 1990 but today of Denis Kessler, ex n°2 of the MEDEF). Concretely, that wants to say that productivity gains will be absorbed by these demographic trends. The productivity gains awaited for the years to come are of 1,75%. If it is withdrawn from these profits the 0,5 point due to the increase in the number of reprocessed it remains 1,25%. However, since the productivity gains are equivalent to the profits purchasing power, the purchasing power would increase annually in the future “only” by 1,25%, that is to say a rise twice more important than that observed annually at the time of the twenty last years. The progression of the direct wages is certainly relatively less important but this loss of revenue direct is compensated by a level of Pension higher than that proposed by the Fillon reform. This scenario thus shows that it is possible to maintain a rate of constant replacement while ensuring the progression of the purchasing power of everyone.

Under these conditions, the share of GDP that the company will have to devote to the financing of the retirements in 2040 will currently be of 18,5% against 12,5%. One thus needs a rise of 6 points on behalf of the GDP devoted to the retirements, this rise being carried out over 40 years. It is thus necessary, as the figure the HORN, a rise of contribution rates of 0,37 point to per annum maintain the level of the pensions and the duration of contribution. There exist several possibilities to finance this increase in contribution rate.

; The Division of the added-value

The division of the Added-value (between Wages S and Profit S) is stable in France since the end of the year 1980, around 65%. After a big rise in the years 1970, a high point had been reached in 1982 with 72%, had been followed by a fall related to a wage moderation, structural changes, and a rise of the contributions]]. It is possible to calculate the contributions on a basis higher than [[wage bill]]; the plate of calculation could include part of [[profit]] the S, and it would be also possible to modulate the level of the contributions according to the share of [[wages]] the S in [[added-value]] of each [[company]]. With this proposal, there would be an incentive for the companies to support employment with a fall of contribution rate. This measurement seems doubly effective since it supports employment and thus increases the contributions. However, this measurement is criticizable on the fact that, if the contributions drop according to the share of the wages in the added-value then the companies will increase the share of the wages until the falls of contribution compensate for the increase on behalf of the wages. ; Alternatives are possible It is thus seen that alternatives to the Fillon reform are proposed. These alternatives related to the financing of [[retirements]]. It is possible to exploit other factors to ensure a project different from that from [[government]]. ====Les levers of middle to long term: a potential with mobiliser==== ===== It [[equation]] of the financing of the mode ===== The financing of [[retirements by distribution]] can overall be summarized using one [[equation]] relatively simple: ''' R=D ''' where ''' R ''' represents the resources and ''' D ''' the expenditure. Or: ''' A.E. (1-c). S.t = V.p.R ''' In the equation above, ''' has ''' represents to it [[Active population|population in age to be active]], ''' E ''' the activity ratio, ''' C ''' the rate of [[unemployment]], ''' S ''' the rate of [[wages]] average, ''' T ''' the rate of [[National insurance contribution|contribution]], ''' V ''' the number of people of more than 60 years (having sufficiently cotisé to perceive [[pension]] S), ''' p ''' the average rate of pension and ''' R ''' average revenue of the pensioners. ===== Analysis of the reform Fillon ===== The Fillon reform aims to reconsider the countable imbalance born of [[ageing of the population]] by increasing the duration of [[National insurance contribution|contribution]]. The rise of the number of people of more than 60 years V would be compensated with the third (by 2015) by that of the activity ratio E (increase of this rate at the most 55 years) and to two thirds by that of (1-c) (drops rate of [[unemployment]] to 5%). Another analysis of the Fillon project can however be elaborate. The ageing of the population would be compensated by a fall of the rate of [[pension]] (or rate of replacement) p. This vision is that defended by the steps “reformist”, “reforming” and “radical”. ==== Analysis of the scenario “reformist” ==== The scenario reformist wants to entirely make rest the balance of the financing of the mode on a rise of the rate of [[National insurance contribution|contribution]] T. This maximum rise of T was already previously detailed and is quantified to 0,37 point per annum until 2040 with profits of [[purchasing power]] more than acceptable. From now on, it is possible to reduce this maximum increase in contribution rate while exploiting the other variables that optics “reforming” and “radical” tried to put in prospect. ===== the objective of the reduction in [[ratio]] in dependence ===== The estimates of the various plans published in [[years 1990]] have a joint point: they underestimate the potential of activity completely that it [[Company (social sciences)|company]] can mobilize. They indeed regard as data all them [[statistical]] relating to the future relationship between the number of [[Active population|credits]] and the number of pensioners, i.e. statistics relative to [[ratio]] of dependence. In other words, the various reports/ratios on [[retirements]] envisage for 2040: 83 reprocessed for 100 credits (against 44 currently) but they omit for the majority to announce that these statistics are only projections: only it [[council of orientation of the retirements|C.O.R.]] effleure the subject. [[Immigration]], it [[unemployment]], the activity ratio of the women and as a last resort, the age starting to the retirement are as many variables on which it is possible to play when one seeks to increase the number of credits and to a lesser extent to decrease the number of pensioners. The starting age to the retirement is the lever privileged by [[government]] but contrary to this one, [[Michel Husson]] primarily conditions it with a fall of unemployment rate at the most 55 years. The lever of unemployment however does not seem to be most powerful in term of potential of activity. The activity ratio of the women was studied more closely by Esther Jeffers and [[Christiane Marty]]. The two members of [[Attac]] indeed quantify to 1,8 million the potential of credits which represent the inactive women, that is to say 7% of the whole of the credits planned for 2020. That would thus allow an increase in the activity ratio E. But, even an unemployment rate with 3% in 2020 would allow only one profit of 6% for the potential of French activity. Moreover, that would certainly make it possible to recognize all the social utility of the activities of these “inactive” in the associative medium and within [[economy] the] domestic one. To accept more important flows of immigration would be also a possibility to plan to use to the maximum the potential of French activity, through an increase in A. While exploiting these four variables, it would be thus possible to reduce the ratio of dependence and to limit in same time “the equivalent [[productivity]]” necessary to the maintenance of one [[retirement by distribution|mode by distribution]] high level, to 0,35 point instead of 0,5. It is the estimate (“reasonable” for its authors) that make [[Pierre Khalfa]] and [[Pierre-Yves Chanu]] of the benefits that it [[France]] could draw from this potential of activity. The rise of [[the National insurance contribution|contributions]] would be thus less “painful”. ===== the lever of [[the Economic growth|growth]] ===== It is necessary from the start announce that the profits of [[productivity]] annual estimated at approximately 1,75% for the forty next years in [[France]], are not a priori synonymous with a step [[productivism|productivist]] excessive. However, a faster growth of [[GDP]] or productivity would make it possible to facilitate even more the adjustments necessary to the financing of [[the retirement by distribution|mode by distribution]]. The Teulade report/ratio had been interested in the average growth rate which would have made it possible the share reserved for [[retirements]] in the national revenue to remain stable: this growth rate was then estimated at 3,5%. France in this scenario knows a growth comparable with that of [[Thirty Glorious]], it should resort then to flows of [[immigration]] important and especially to the creation of at least 15 million employment. “The Teulade scenario” is regarded as incredible, that it is on behalf of the contributors in [[law]] Fillon or of the opponents, but a relatively fast development of [[economy]] French seems the being a little less… ===== [[Tax]] R it [[capital]]? ===== Some holding of the “reforming” scenario sought to find new funding sources through one [[tax|taxation]] on the financial incomes. This scenario appears legitimate for those point finger the modifications which knew it [[division of the added-value]] during the thirty last years. This measurement is not therefore free from criticisms. It would indeed subject the resources of social protection to the activity of the financial sphere. However, this financial activity which has grown louder and louder for 25 years is made with the costs of [[wages]] the S and for this reason holding them of the scenarios “radical” and “reformist” are very skeptics with respect to this idea. Thus, according to many “radicals”, the best means of reducing the financial incomes to their most adequate portion, is to push the wages upwards. In the same way, to set up this taxation as means of financing of [[retirements]] amounts inserting in [[the retirement by distribution|mode by distribution]] part of financial volatility; a means apparently not very sure when one seeks to guarantee the financial balance of the system. The “radicals” are not inevitably against this taxation but they see it more like one [[tax]] intended for the financing of [[budget of the State]]. ==== the Fillon reform reveals the question of the choice of [[Company (social sciences)|company]] in the question of the financing ==== In a few years, financing of [[mode of the retirements]] and consequently it [[retirement by distribution|distribution]], are likely to be again questioned. However, even if the alternatives “reformist”, “reforming” and “radical” have the merit to work out lines of thinking for the financing of a system per high level distribution, the choice to make whole remainder. Indeed, the question is not to know if a mode by high level distribution can always be financed, but rather to know if it [[Company (social sciences)|company]] French wants to finance this type of mode. It should be wondered whether the French citizens want to mobilize a more significant part of their income to make perdurer a mode by distribution of good quality. The question deserves to be posed taking into consideration relay and project [[government]] Al from which it profited near certain trade-union organizations but also in [[media]] S. Thus, if one chooses not to give oneself the means of making perdurer a mode of retirement per high level distribution, this choice will be above all [[political]] and it will be useless “to hide” behind obscure data [[demographic]] S. the French citizens thus have completely the right to break with logic with the work since [[1945]] and who indicated a real will to reduce it [[poverty]] in the elderly and to bring closer their standard of living to that of [[the Active population|credits]]. It is completely possible to weaken the Utopia according to which, at the end of his life, any citizen has the right to leave the sphere of wage-earning while receiving a decent income all the same. In the same way, the political dimension of the choices of financing makes party of the topic of the retirements and the Fillon reform. Thus, the return to the balance of the mode could as it was presented previously, to be done using an increase in flows of [[immigration]] or activity ratio of the women, using a fall of the rate of [[unemployment]] or through a retreat of the starting age to the retirement. However, to act only over the duration of [[National insurance contribution|contribution]] would return for part of the social actors for example, to push back with later the true problem which the women in the field of application encounter. Just like the fall of unemployment or the recourse to immigration, a rise of the activity ratio of the women towards that of the men would have considerable social consequences which could be synonymous with [[progress]]. == Opinions during the presidential campaign of 2007 == The official program of [[the Socialist party (France)|Socialist party]] and that of [[Ségolène Royal]] envisaged to repeal purely and simply it [[law]] reforming them [[retirements]] of [[2003]] {{quotation|By continuing the reform [[Balladur]] of [[1993]], the law Fillon of 2003 programmed the lowering of the level of the retirements and the financing does not even guarantee any. It will be repealed}} in '' Réussir together the change '', extracted the socialist project for [[France]] the . This abrogation however was criticized within the PS, inter alia by [[Dominique Strauss-Kahn]] or [[Manuel Valls]] which also pled for the alignment of [[special diets]] the '' " It will be necessary to align the special diets on the mode général" , Manuel Valls '' admits, [[the Platform]], September 10th, 2007 . == Conséquences in 2006 == The law Fillon was fixed like objective to act on the financing of the modes of retirement by differing the age from departure to the retirement. This mechanism was to involve a rise in the global amount of the contributions retirements (employees remaining with work) and a fall of the mass of the versed pensions (employees differing their departure not with the retirement). According to the 5 {{E}} report/ratio of [[the Council of orientation of the retirements|HORN]], made public on November 22nd, 2007, “the mass of the contributions was over-estimated of 1 billion euros in 2006 because of assumptions of progression of manpower of cotisants and the wages which appeared optimistic, and pensions was underestimated 1,5 billion euros in 2006 masses it in particular because the assumption of a retreat of the starting ages to the retirement related to reform of 2003 did not check itself. ” “Retirements, 20 cards of actualization for the appointment of 2008”, 5 {{E}} report/ratio of the HORN, p. 29. [http://www.cor-retraites.fr/IMG/pdf/doc-835.pdf] Indeed, the frequency of the retirements at 60 years accelerated and the number of early retirements for long career more important than was envisaged. The device implemented in particular aimed at increasing the duration of contribution by increasing the surcote for the annual installments of additional contribution and by worsening the rebate for the missing quarters of contribution. According to the report/ratio of the HORN, this reasoning could not face social reality: the majority of paid private sector (60% according to the HORN) do not have any possibility of choosing to remain with work or to leave in retirement because they are not any more with work at the time of their retirement but with unemployment, in disease or disability. The “national plan” for the employment of the “seniors” seemed a corrolaire essential to the success of the government policy as regards retirement. It aimed to increase the rate of use of the 55-64 years which is less low in France (37,8%) that in the whole of the European Union (42,5%). According to [[the Council of orientation of the retirements|HORN]], it does not seem, “to date, to have inflected the behaviors of paid and the employers” Idem, p. 21.. In 2006, the contracts of saving retirement represented one incur total of about 100 billion euros, and concern more than 6,5 million cotisants annuels [http://www.senat.fr/rap/r05-486/r05-48610.html the saving reprocesses in France three years after the “law Fillon”: which complement with the modes of retirement per distribution?] site of [[Senate]] the . == Notes and references == {{references|colonnes=2}} ==Bibliographie== * '' [[Alternate economic]] '' of April, May, June and July-August 2003 * '' [[Alternate economic]] '' (Out of the ordinary), “social protection” (first quarter 2003) * [[Attac]] (begun again work of G. Netting), “Elements of history of the retirements” (May 2003) * [[Attac]] (commission women, kinds and universalization), “Women and retirements: we all are and concerned” (April 2003) * [[Martine Bulard]], “Fools' deal for the retirements” '' diplomatic Le Monde '' of March 2003 * [[General confederation of work|CGT]], “12 reasons to reject the reform Seam-Balladur” (accessible on the site from “Sharp leaves again it! ”) * [[the Council of orientation of the retirements]] (C.O.R.): various reports/ratios (see the heading Internet site) * [[Laurent Shoe-maker]], “No pity for the gueux ones”, Reasons To act (2000) * [[Laurent Shoe-maker]], “It is what 43 billion euros? ” '' Le Monde Economy '' of June 11th, 2003 * [[Patrick Cuvelier]], “Financing of the retirements”, Course of first year of D.E.U.G economy-management (2003) * [[Bernard Friot]], “the Stake of the reforms of the financing of the retirements” May 20th, 2003 (accessible starting from the site from “Sharp leaves again it! ”) * [[Michel Husson]], '' Breakers of the Social state '', the Discovery (2003) * [[INSEE]] (E. Nauze-Peg, F. Lerais and S. Lhermitte), “Projections of active population 2003-2050” (see heading Internet) * [[ANGERS]] ([[Samia Benallah]], [[Pierre Concialdi]], [[Michel Husson]] and [[Antoine Math]]), “Retirements: scenarios of the reform” (2004) * [[Esther Jeffers]] and [[Christiane Marty]] ([[Attac]]), “Financing of the retirements: and if the women were the future of the men? ” (May 2003) * [[Pierre Larrouturou]], “the true problem, it is unemployment!” * [[Jean-Paul Piriou]], “Retirements: let us cotisons in good mood! ”, '' Le Monde '' of May 9th, 2003 * [[economic Problems]], “Health, retirements: 2003, the year of the reforms” (first quarter 2003) == Voir also == === internal Bonds === * [[Retirement in France]] * [[Retirement by capitalization]] * [[Retirement by distribution]] * [[Reserve funds of the retirements]] * [[the Council of orientation of the retirements]] * [[Special diets of retirement]] ===Liens externes=== * [http://www.retraites.gouv.fr the governmental site on the retirements] * [http://www.cor-retraites.fr official site of the HORN] (it [[the Council of orientation of the retirements]]) * [http://www.insee.fr/fr/ffc/chifcle_liste.asp?theme=4&soustheme=5&souspop= Retirements] on the site of [[INSEE]] * [http://reparti.free.fr “Lives leaves again it! ”] * [http://www.lexpansion.com/economie/pourquoi-votre-retraite-est-menacee_26203.html Why your retirement is threatened], 1 {{er}} November 2006, [[the Expansion]] {{multi stringcourse|gate French right|gate economy}} [[Category: Reprocess]] [[Category: French law|Fillon (retirements)]] [[Category: French company

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