Pensions: The Pensions Advisory Council anticipates a larger deficit and suggests a retirement age of nearly 68 by 2070.

The financial stability of the French pension system could deteriorate further than anticipated in the coming decades. In its draft annual report, to be reviewed this week by its members, the Pensions Advisory Council (COR) has significantly revised its deficit projections upwards to 2070. The body now estimates that the system's financing needs could reach 2,4% of gross domestic product by that date, compared to 1,4% in its previous estimates published in 2025. This revision marks a significant shift in long-term outlooks and reflects the growing challenges facing the French system in the context of an rapidly aging population.

While short- and medium-term projections remain relatively stable, with a deficit estimated at 0,2% of GDP in 2030 and then 0,9% in 2045, the French Pensions Advisory Council (COR) emphasizes that imbalances are expected to worsen gradually over the decades. According to the organization, the system's revenues will not grow quickly enough to offset the increase in the number of retirees and the rise in life expectancy. This trend will have a lasting impact on public finances and raise the question of further adjustments to the French pension model to ensure its sustainability.

A gradual increase in the retirement age is presented as the main lever

To limit the worsening deficit, the Pensions Advisory Council considers that the main tool available to public authorities remains extending the working life. In its reference scenario, the structural balance of the system could be ensured by a gradual increase in the average retirement age. This would reach 64,4 years by 2030, then 65,8 years in 2045, before rising to 67,6 years in 2070. This projection is significantly higher than that used in the previous report, which envisioned an average retirement age of 66,5 years by that date.

Such a prospect is likely to fuel political debates in the years to come. The pension reform adopted in recent years continues to generate strong opposition among a segment of the public, while several political parties are already calling for a return to a lower legal retirement age. However, the new estimates from the French Pensions Advisory Council (COR) bring back to the forefront the question of extending working life as a means of preserving the financial balance of the system without massive increases in contributions or reductions in pensions.

The decline in the birth rate profoundly alters projections.

One of the main reasons given for this revision of the forecasts concerns the country's demographic trends. The French Pensions Advisory Council (COR) has incorporated a lower fertility rate assumption into its new calculations than the one previously used. The total fertility rate is now estimated at 1,45 children per woman in the long term, compared to 1,8 in previous scenarios. This revision reflects the continued decline in births observed in France for several years.

This trend has direct consequences for pension funding. With fewer children today, the number of working people needed to finance pensions tomorrow will inevitably be lower. At the same time, the large baby-boom generation continues to age and live longer. The ratio of contributors to retirees is therefore expected to continue to decline in the coming decades, making it more difficult to balance pension systems without structural adjustments.

The role of supplementary pensions in the increase in the deficit

The French Pensions Advisory Council (COR) also emphasizes that the new rules adopted by the social partners for the Agirc-Arrco supplementary pension scheme contribute to the deterioration of the financial outlook. The pension adjustment methods defined for the coming years are considered more favorable to retirees than those considered in previous scenarios. This improvement in benefit levels represents an additional long-term expense for the entire system.

According to the organization, this trend contributes to the projected increase in the deficit for 2070. Even though these measures aim to protect retirees' purchasing power in the face of inflation and economic fluctuations, they increase future financing needs. The Pensions Advisory Council (COR) therefore emphasizes that the choices made today regarding pensions will have lasting effects on the overall balance of the system.

A topic destined to dominate the political debate

With less than a year to go before the start of the 2027 presidential campaign, the conclusions of the Pensions Advisory Council could quickly become a major topic of public debate. The projections presented highlight the scale of the demographic and financial challenges that France will face in the coming decades. Between raising the retirement age, changing contribution rates, adjusting pensions, or using other sources of funding, several options remain on the table.

While the COR's projections are not definitive forecasts but scenarios based on economic and demographic assumptions, they nonetheless offer valuable insight into current trends. For the institution, population aging now appears a certainty, while the issue of pension financing will continue to be one of the country's major economic and social challenges until the middle of the century.