Communiqués de Presse

The Pensions Advisory Council overlooks an average of €33 billion in pension deficits per year since 2002

Paris, 14 September 2022 – The Institut Économique Molinari is releasing an original study quantifying the French pension deficit, taking into account the deficit of the State and the imbalances in the pensions of civil servants, issues overlooked by the Pensions Advisory Council (COR).

Constructed using official data, this study offers an unprecedented view of the pension imbalances, which constitute a key factor explaining the systematic nature of public deficits following the after-effects of the baby boom.

The pension deficit is eight times larger than the estimates published by the COR

Since 2002, the COR has calculated the pension deficit using a questionable method, omitting the public deficit and the exceptional nature of pension contribution rates in force in the public sector.

Once we correct this oversight, we find the pension deficit has averaged 1.5% of GDP since 2002.

The pension deficit is eight times larger than the estimates published by the COR over the last 20 years (0.2% of GDP since 2002).

The COR overlooks that €33 billion in subsidies must compensate for the imbalance in civil service pensions every year.

Since 2002, the COR’s calculation of the pension deficit has been omitting the subsidies that allow balancing of civil service pensions. These represent 1.3% of GDP per year since 2002, or €33 billion today.

The COR does not take into account the exceptional nature of the contribution rates in force in the public sector. Pension contributions represent 85% of the gross salaries of civil servants, i.e., three times more than the pension contributions of private sector employees (28% of gross salaries). Pension contributions represent 85% of the gross salaries of military personnel and 42% of the gross salaries of local government employees.

Two-thirds of the pension contributions made by public employers are similar to balancing subsidies that mask the deficit in civil service pensions. Compared to the private sector, public administrations contribute 57% more on the gross salaries of civil servants, 109% more on the salaries of military personnel and 14% more on the salaries of local government employees.

This figure takes into account the virtual absence of pension contributions on civil servants’ bonuses, which are only subject to the contribution to the ERAFP, the civil service pension fund.

The COR leaves out these balancing subsidies that explain the State’s inability to balance its accounts since the 1980s while obstructing all financial room for manoeuvre.

The French State has been particularly short-sighted in the face of ageing

Far from being negligible, the real pension deficit (1.5% of GDP per year on average) represents more than 10% of pension expenditures from 2002 to 2020 (13% of GDP).

When one takes into account balancing subsidies linked to public employers’ contributions, pensions account for 36% of public deficits from 2002 to 2020 (4.2% of GDP per year on average).

From 2002 to 2020, pensions paid to their former employees by the State and central administrations increased by 142% in current Euros, which is three times faster than other expenditures (+44%). The State’s pension budget has risen from €27 billion in 2002 to €65 billion in 2020.

The pensions of former civil servants now account for 15% of the general budget and weigh heavily on ministries with large payrolls. For example, they account for 28% of the expenditures of the Ministry of Education.

The lack of providence of the State in the matter of pensions has a negative impact on public finances and on the value for money of public services. The average State employee currently costs the public 29% more than the average private sector employee, though earning only 12% more in net salary. This difference arises from the disproportionate nature of public pension contributions.

On December 31, 2021, the pension commitments made to civil servants and military personnel amounted to €2,635 billion (source: General State Accounts). This was almost as much as the public debt according to the Maastricht definition (€2,813 billion).

This divergence is due to the short-sightedness of the State as employer. The State promised its employees generous pensions without anticipating the deterioration in demographics (0.9 contributors for 1 retiree in the civil service).

Unlike responsible public and private institutions (the Bank of France, CAVP, the Senate, etc.), the State has not set aside any money to finance the pensions of its employees. Experience shows that this is the most economical way to ensure that the commitments made are respected. This practice also reduces the cost of pensions, since the gains generated by financial investments allow public money to be saved.


Nicolas Marques, Director General of the Institut Économique Molinari, author

Since 2002, the Pensions Advisory Council has been calculating pension deficits as if the pensions of civil servants were financed by a balanced budget and with sustainable contribution rates, which has never been the case.

“In a democracy, reform requires a minimum of support. Support requires an understanding of the issues at stake, which is impossible to achieve when official institutions produce misleading indicators that obscure the issues. This is what has been happening with pensions in France for the past 20 years.”

Cécile Philippe, President of the Institut Économique Molinari

Since the baby boomers began to retire, the lack of funding for civil servants’ pensions has weighed on public accounts. The State has developed a well-known expertise in issuing public debt, but it has been unable to optimise the management of pensions to avoid squandering public funds. Yet the stakes are just as significant; the monies pledged to State employees (105% of GDP) are on the same order as the public debt (112% of GDP).

“If the State had been as far-sighted as the pharmacists of the CAVP, the Senate or the Bank of France, it would have set aside money to prevent the pensions of civil servants from being financed entirely by taxpayers or the public debt. Similarly, it would not have prematurely emptied the Pensions Reserve Fund (FRR) and considered closing the French Public Service Additional Pension Scheme (ERAFP), institutions that generate several billion in earnings each year from their investments.


Link to study (46 pages, in French only):


The calculations were based on official data, with the COR figures supplemented by the Rapport annuel sur l’état de la Fonction publique, the Rapport sur les pensions de la fonction publique, the Compte général de l’État, and data from INSEE.


The Institut économique Molinari (IEM) is a research and education organisation with the mission of promoting individual freedom and responsibility. The Institute aims to facilitate change by spurring debate around preconceived ideas that engender the status quo. It seeks to stimulate the emergence of new consensus positions by offering an economic analysis of public policy, demonstrating the value of dialogue and indicating the benefits of more lenient regulation and taxation. The IEM is a non-profit organisation financed by voluntary contributions from its members: individuals, foundations and businesses. Putting intellectual independence foremost, it accepts no public subsidies.


Nicolas Marques, Managing Director, Institut économique Molinari
(Paris, in French)
+33 6 64 94 80 61

Or Cécile Philippe, President, Institut économique Molinari
(Paris, Brussels, in French or English)
+33 6 78 86 98 58

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