"Will the pension emergency shift the focus in favor of capitalization?"

Always think about it , never talk about it, and make minimal reforms: this was the position of right-wing governments on pension funds for thirty years. Politically dangerous, rejected by unions and the left, eclipsed by the reforms that kept pay-as-you-go schemes afloat, the scenario of introducing a dose of capitalization into the French system is making a strong comeback, especially supported by former Prime Minister Edouard Philippe, who wants to make it a central issue in the 2027 presidential campaign, within the broader framework of saving a welfare state threatened with bankruptcy.

Everyone can at least agree on the diagnosis, made by the Court of Auditors in a report published Monday, May 26. It is alarming. All branches combined, the Social Security deficit will double by 2028. Health insurance is the main culprit with a "hole" of 13.8 billion euros in 2024; the basic pension scheme also contributes, even if it is "only" in deficit by 5.6 billion and if the private sector supplementary funds (Agirc-Arrco) are profitable. The financial trajectory of the general scheme in the medium term, like that of the State, is "out of control" , warn the magistrates of Rue Cambon, who no longer exclude a default in payment of certain benefits.

Pension financing has been a work in progress for three decades. In 1991, the financial and demographic situation was not as critical, and Michel Rocard's White Paper recommended, among other things, extending the contribution period. The then Prime Minister wanted "the broadest agreement on data, perspectives, and solutions" between social partners to balance the system. He merely proposed "encouraging companies to enhance employment contracts with a deferred salary component in the form of pension funds." The highly controversial debate was launched.

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