In a press release issued as part of the debate on the future of the pensions system, Aca describes its ambitions straightforwardly. It calls for “a balanced, sustainable and more flexible system” and describes the current system as being under pressure, since, “from 2027-2028, pensions paid out will exceed contributions received,” with a risk of reserves running out by 2047 in the absence of reform.

According to Aca, although the primary objective is to restore balance to the first pillar of pension insurance--namely social security pension insurance, which must remain the bedrock of the system--it recommends that the other two pillars should not be neglected. It terms them “levers of resilience.”

The second pillar is governed by legislation on supplementary pension schemes (set up by employers for their employees) while the third concerns individual old-age provision. According to the approach advocated by insurers, the latter two pillars should be retained, but improved, i.e. “strengthened to provide flexibility, customisation and security.”

With regard to the second pillar, only “14% of employees benefit from a supplementary scheme.” Aca recommends modernising the scheme through a number of measures, including making it open to the entire working population as well as allowing a tax catch-up throughout a person’s career. It also argues for early access to funds in case of need, the introduction of a revalued tax deduction ceiling.

Also on the subject of supplementary pension schemes, the insurers’ association is also calling for a tax incentive for young members, an administrative simplification and better legal certainty for cross-border commuters.

To stimulate the third pillar of the system, i.e. individual pension provision--which is currently “underused” despite a slight increase in subscriptions--Aca mentions six interesting levers: an increased tax deduction that could go up to €12,860 per year; greater flexibility in the use of savings; appropriate taxation on exit; the possibility of a tax catch-up over one’s entire career; tax transparency for non-residents; and the transferability of contracts.

“It is essential to maintain these arrangements, but they need to be improved. Confidence in the creation of individualised rights is an important key to success,” insists Aca, according to which “we have enough hindsight to propose significant improvements that will enable them to be used. These maintain the watertight seal between the different pension contribution systems within a framework of sound governance.”

This article in French.