The projections carried out in 2012 by the Pension Advisory Council (COR) still point to significant deficits in the pension schemes in the short and medium term: addressing these deficits will certainly be at the heart of the review announced for 2013. However, the median scenarios in these projections foresee a situation that will have almost stabilised by 2050–2060. Can we conclude from this that the problems still to be addressed are now merely temporary?
Significant progress has indeed been made since the early 1990s, with reforms affecting both replacement rates and retirement ages. However, the resulting balance remains highly sensitive to growth assumptions, due to the mechanisms adopted to curb the share of pensions in national income. A 0.3-point decline in the growth rate increases the ratio of total pension expenditure to gross domestic product (GDP). Finding balancing mechanisms that are less dependent on growth could be one of the areas for focus in any potential structural reform, in addition to the objective of simplifying a particularly fragmented system.
