Pension reform: what redistributive effects are expected?

Summary The pension reform aiming to introduce a universal pension system with a defined return in points will have the consequence of reinforcing the contributory character of the pension calculation formula. While in the current system the contributory core has anti-redistributive effects - increasing pension inequalities relative to wage inequalities - the new system would become neutral and the reform would thus lead to a reduction in pension inequalities. The reason for this unintuitive effect - an increase in contribution reducing inequalities - is the correction of mechanisms implicit in the current system, such as the rule of the best 25 years or the revaluation by inflation of the wages included in the calculation of pensions. The abolition of the insurance duration rule in the scale also reinforces this effect by benefiting relatively more individuals with low average wages. In this note, we highlight these effects based on simulations carried out on the population of private sector employees. In addition to low-wage individuals, women would largely benefit from this change in the calculation formula.