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Complementing or replacing old age insurance? : the growing importance of funded pensions in the French pension system

[working paper]

Naczyk, Marek; Palier, Bruno

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Corporate Editor University of Edinburgh, Publication and Dissemination Centre (PUDISCwowe)
Abstract The French pension system has for long been characterised by its very low reliance on funded pensions, which have almost become a taboo subject since the Second World War. While other countries have often complemented statutory pensions with funded occupational pension schemes, in France, the social partners have put in place an encompassing network of supplementary pension arrangements financed on a pay-as-you-go (PAYG) basis. The generosity of these schemes and their defence by trade unions and part of the business community has considerably limited the room for expansion of funded pension schemes. However, the role played by these supplementary PAYG schemes has significantly changed over the last two decades. First, the gradual harmonization of rules within the different schemes and their compliance with EU social security regulations are leading to their quasi 'first-pillarization'. Second, similar to statutory pensions, these schemes have also undergone gradual retrenchment and will offer reduced replacement rates. As a result, the development of pension savings has been implicitly promoted, although more on a voluntary basis than on a compulsory one. Despite a unification in the regulatory framework governing funded – occupational and personal – pension plans, access to these schemes remains mostly limited to high-skilled workers.
Keywords France; pension insurance; model; pension; retirement planning; capital formation; private provision; pay-as-you-go; governance
Classification Social Security
Free Keywords France; occupational fragmentation; pay-as-you-go occupational schemes; funded private pensions
Document language English
Publication Year 2010
City Edinburgh
Page/Pages 42 p.
Series Working Papers on the Reconciliation of Work and Welfare in Europe, REC-WP 08/2010
Status Published Version; reviewed
Licence Deposit Licence - No Redistribution, No Modifications