Making a Start on Pension Reform

It seems clear that no one now doubts the need, which has been obvious for some time, for a thoroughgoing reform of the French retirement “system”, if only because of the unstoppable process of demographic ageing that is to be seen in the increasing proportion of so-called “senior citizens” in the total population or, even more markedly, in the imbalance between the number of working years during which French people make pension contributions and the number when they live mainly on transfer incomes. And the reform actually needed cannot just consist in tinkering with individual parameters, but requires a total recasting of the “system”.
Jacques Bichot was perhaps the first person to propose such a radical recasting of the French retirement system, a reform consisting in, first, putting an end to the (“absurd, unfair and inefficient”) diversity of pension regimes by unifying them and, second, establishing a single points-based retirement regime (rather than one based on annual contribution records). In this he has a twofold objective: to leave those involved free to manage — and personally responsible for — their pensions, while incentivizing everyone to make the essential effort of national solidarity.
The author does however recognize that, given current conditions, such a radical reform cannot be implemented overnight. He goes into this question in some detail, showing how a similar operation in Sweden, conducted in much more favourable conditions, turned out to be lengthy and difficult. What can France do in 2010, then, to face up to this problem and at least start out on the road towards the requisite “big bang”?
Jacques Bichot describes the measures he believes must be adopted right away to introduce a mechanism into the general pensions system that can both maintain the financial equilibrium of the schemes and, at the same time, enable French workers to enjoy an à la carte retirement in a way that is actuarially neutral. This article shows the first steps that would need to be taken to make a genuine start on reform.