How long can last the ‘Pay As You Go' pensions ? (followed by the case-study of France)

Extraits de l'exposé

[...] Vital and unavoidable, pension funds should then be coupled with Pay As You Go pension systems, giving indeed birth to the mere prefect system ensuring retirement-income security and addressing ripple economic effects. III. The case study of France The Prime Minister advocated a going-on Pay As You Go pension system in his speech dated the 21st of March. Though financing needs adapted to real economic concerns are to be implemented. répartition est le symbole de la chaîne de solidarité qui relie entre elles les générations. [...]

[...] - 2nd pillar: occupational pensions arranged by employers and employees on the market: compulsory for all employees. - 3rd pillar: private savings. Three conclusions can thus be drawn: - To search for different sources for financing social security schemes, i.e a fall in taxes on formal employment. - To encourage complementary insurance schemes. Pension provision should not rely primarily on public pensions finances on a PAYG basis. This diversification implies introducing a multi-pillar structure, where the first is State provided, while the second and eventually the third are State regulated but privately managed. [...]

[...] In the PAYG pension schemes, this return is close to the long term rate of growth of the economy. In funded pension schemes, the return equals the return of financial assets and in the long run, is higher than the rate of growth of the economy. Though, funded pension scheme presents drawbacks, since it enhances financial risk. Foreign investors hold 35% of the French stock market and nearly 50% of the capital of French firms. The presence of Anglo-saxon pension funds is growing. [...]

[...] How long can last the As You Go' pensions? (followed by the case-study of France) Most countries do provide retirement pension schemes within the framework of Pay As You Go pensions. This system however encounters today some unprecedented drawbacks, mainly due to the burden of an ageing population. The future of the retirement system is a real economic concern, not simply a financial one, which needs to be addressed, if the demographic shock is not to mean an inflationary shock. [...]

[...] The Pay As you Go pension scheme has seemingly proved inefficient and irrelevant in today's economic world . The burden of an ageing population One way of alleviating the burden of ageing population might be to rise the age of actual average retirement. In place of the old custom of ?first in last out', firms will tend to offer retirement first. Since the pensions which early retirees receive are often publicly funded, this involves a shift of the cost of labour adjustment from individuals and the firms which employ them to the whole community. [...]