Out of the box Protest in France over Pension Reform
There is big protests in France over the pension reform. Some reports said that over a million people joined the protests.

The government wants to change the retirement age from 62 to 64 years. This means that the elderly will receive the pension 2 years later.

The elderly said that the delay in the pension age is unfair. They have contributed to the state during their working lives, and they should receive their pension at age 62, as was promised.

I wish to explain why the French government has to make this change.

In general, people are living longer. If the retirement age is fixed at a certain age, the payout period will increase as the years go by, due to the longer life span.

According to the World Health Organization, the life expectancy in France after age 62 in the following years was:

1990: approximately 18 years
2000: approximately 20 years
2010: approximately 21 years
2020: approximately 22 years

It's worth noting that these are average estimates and that life expectancy can vary depending on a variety of factors such as gender, lifestyle, and socioeconomic status.

It is costly to a country for a pension scheme to pay a pension for 22 years. This burden has to be borne by the working population. It can be a heavy burden.

Based on my judgment as an actuary and financial expert, a reasonable payout period should be between 10 to 15 years.

The suggestion by the French government to increase the pension age from 62 to 64 is reasonable. Based on a retirement age of 64, the pensioner can expect to receive a payout of about 18 years, which is higher than the upper band of 15 years that I have suggested.

Normally, I prefer to be generous towards the elderly people. However, we should also be fair to the younger people, who have to pay a higher rate of tax to support the pension scheme which is becoming more expensive.

I hope that the elderly people will consider the interest of the younger people as well.

Singapore adopts a provident fund scheme, where a person keeps his contribution in his person account and received the balance in the account on the retirement age. This type of scheme does not have the financial problem faced by a pension scheme where the cost increases due to a longer lifespan of the pensioners. 

Tan Kin Lian

https://youtu.be/GwN_3_-pZ-c
 

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