Lhe Senate decided on March 5 to launch a study to examine the advisability of a dose of collective capitalization in the pay-as-you-go pension system. Happy coincidence of the calendar, the Sapiens Institute had published, a few weeks earlier, a study entitled “For a dose of capitalization in our pensions”, very favorable to such a device.
Our pay-as-you-go pension system would be ” breathless “ to use the terms of the Sapiens Institute. Curious expression, because there is nothing natural about a pension plan, it is not a galloping animal losing its breath, it is an institution, that is to say a device that is created by based on principles reflecting the societal project, and which evolves as we decide to make it evolve. The pay-as-you-go and funded pension systems are very different in this respect.
The first is non-commercial, under the aegis of Social Security, while the second, on the contrary, is commercial and entrusts retirement to a financial organization (pension fund, retirement savings fund, pension fund, life insurance …) responsible for collecting contributions and placing them on the financial markets to serve the result in the form of pensions, and which for this purpose commissions its services, all the more expensive as its market share is important. The first is based on an assumed intergenerational solidarity, because working people know that they are paying for retirees, while the second places everyone under the illusion that their retirement depends only on their own effort to contribute, whereas it remains fundamentally a levy on economic activity and therefore on the work of the “assets” – otherwise the investments of the pension fund or the pension fund would not be based on any real value.
These institutional arrangements are performative, in the sense that they shape society according to the principles and values that underlie them. Linking retirement to the market, and more specifically to the financial markets, means inducing profit-seeking behavior, performance, competition, which, as Karl Polanyi explained in The Great Transformation (1944), have nothing natural about them, but are indeed the result of the institutions put in place. Basing the pension system on Social Security and intergenerational solidarity does not make these behaviors necessary and installs more cooperation, sharing and respect between generations.
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