Retirement: early departures for long careers will become scarce

Bye-bye long careers. After having met with great success since 2010, this early retirement scheme is declining rapidly. The remedy should become scarce by 2019, with around 35. 000 new beneficiaries each year, against a peak at 62. 000 in 2017 in the private sector (excluding professionals, farmers, special schemes). According to the Social Security Accounts Commission, while around a quarter of policyholders born between 1950 and 1957 were able to leave earlier thanks to the long career plan, this proportion would be only 5% from the generation 1973.

Should the conditions for access to long careers be made more flexible? Or, on the contrary, let them melt away, by giving priority to support for workers in arduous occupations? It is a good subject of debate for the social partners. On 09 July, Emmanuel Macron announced that the consultation on pensions would resume at Matignon at the start of the school year, because “we will have to work longer and retire later”. “I will not launch this reform as long as the epidemic is not under control and the recovery is well assured,” he said. At least this will be a hot topic of the presidential campaign.

Over 5 billion in term savings If you have to retire later, the fate of certain contributors will have to be softened. Long careers have been conceived of as compensation for deserving workers: the beneficiaries are generally workers or modest employees, who began to work young ( five quarters of contributions before the end of the calendar year of 20 years) , and who have already had a full career at 43 years. Without this device, they would have to continue working until 60 years, contributing “for nothing” – without being able to increase their retirement for the duration of insurance.

The ebb of the system, if no reform is undertaken to slow it down, should generate savings over the years. In 2019, it cost 5.9 billion euros to the general scheme and to the aligned basic and complementary schemes: 4.6 billion in pensions paid and 1.3 billion billion in contributions avoided. From 2035, the net cost would only be 180 million euros per year.

The effect of the reform of 2012 First, there were successive relaxations and enlargements of the long career system. The age before which it was necessary to have started working has increased from 12 years at 17 years (retirement law of 2010) then 20 years (decree of 2010). Maternity, unemployment, disability and arduousness quarters were taken into account to validate the full career criterion (retirement law of 2014).

But the current decline in long careers was also part of the reform of 2012. As the required insurance period has increased (40 annuities today, 43 for the generation born in 1973), the number of policyholders likely to have completed a full career at 43 years goes back. Policyholders born in 1957 must have contributed almost without interruption since the age of 17 years to be eligible, notes the Accounts Committee: it is rather rare these days.

Demographic and social factors accentuate the decline. The pool of workers who started young is decreasing, because the duration of studies has lengthened: the average age for the first validation of a term has increased from 18 and a half years for men born in 1950 at 21 years for those of 1975. These policyholders will no doubt leave later, but potentially with better pensions.