![]() Yet, according to De Gooijer, that is not the whole story. Because the French system is financed almost entirely as pay-as-you-go, financial sustainability is more vulnerable than in the Dutch system, which is only partially financed on a pay-as-you-go basis.” This is putting increasing pressure on financial sustainability, because an aging population means that there are fewer and fewer people employed compared to the number of pensioners - and so they have to pay more and more per person to keep pensions at the same level. In France, however, the first and second pillars largely coincide and the second pillar is also almost entirely financed as pay-as-you-go, like our state pension. In addition, in the Netherlands we have the pension funds - the second pillar - which are financed on a capital basis, meaning that premiums paid are first invested for years. In our country, the premiums and taxes for the state pension - the so-called first pillar of our pension system - are paid out in the same year they are paid. “Financing the French system differs fundamentally from the way the Dutch system is financed. Moreover, that pressure is arising sooner in France than in our country. The financial sustainability of the French pension system is indeed coming under more pressure due to an aging population, agrees De Gooijer, who was Dutch ambassador to Paris from 2017 to the summer of 2022. The question therefore arises: why are the French so stubbornly clinging to a retirement age that seems financially unsustainable? Even though a look at the so-called Mercer index - in which pension systems from around the world are assessed on various criteria - reveals that while the French system scores high on pension benefits, it scores low on long-term financial sustainability. Many see that, yet the majority of the population is against shifting the retirement age. Working longer seems to be the logical answer to this. Life expectancy keeps increasing in France too, so the sustainability of the system is a growing concern. After all, ours is 67 and this age will be raised automatically in the future as a result of a further increase in age expectancy - albeit, thanks to the pension agreement, not as soon as previously conceived. The central element is raising the retirement age from 62 to 64. Now, in his second and final term, he is making a new attempt. In his first five-year term, Macron already tried to modernize the fragmented pension system. ![]() ![]() A committee from Assemblée and Sénat (French Senate) is now working on a compromise that will be put to a vote as a whole, possibly as early as Thursday, March 16. ![]() Resistance is especially strong in the Assemblée Nationale (the French equivalent of the Dutch House of Representatives). There is a lot of opposition among the French population to the pension system reform plans, on which the French parliament has yet to decide. Why are the French so stubbornly clinging to achievements that seem financially unsustainable? We asked Pieter de Gooijer, partner at consulting firm Brunswick, who held the position of Dutch ambassador in Paris for five years. The hot issue: raising the retirement age from 62 to 64. The French parliament may nevertheless approve President Macron’s pension reform plans on Thursday, March 16, against which there have been several very large-scale demonstrations and strikes. ![]()
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