What reforms are needed for the pension schemes?
The structure of the pension system, which combines both funded and pay‑as‑you‑go schemes, limits the fiscal impact of population ageing better than in most other countries. However, the funding of first pillar public pensions is not guaranteed beyond 2015. The recent opening of discussions to limit the borrowing requirement – put at 2¼ per cent of GDP between 2015 and 2040 – is timely. The time required to implement a reform should not be underestimated, the more so as reforms have to be phased in gradually so as to provide people with time to adapt. These could include the raising of the retiring age from 65 to 67 and a reform of the pension indexation system, even though this latter measure might be difficult to sustain in the long run. For reasons of equity between generations, it would seem right to focus on both revenues, for instance an increase in VAT, and benefits. Choosing measures which do not hamper growth and which extend working life would be rational and compatible with
