Pension costs in ministry budgets revealed

The government has disclosed the proportion of pension expenses in the budgets of different ministries, aiming to increase transparency. The National Education ministry spends 32% of its budget on pensions, totaling 28.5 billion euros, while the Ministry of the Interior spends 30%, significantly higher than the average of about 13% across all ministries.

Accusations of a hidden pension deficit

This disclosure comes after former Prime Minister François Bayrou accused the state of a "hidden deficit" in pensions, linked to overpayments to civil servants and military personnel. In 2026, these overpayments reached 82.26% for civil servants and 126.07% for military personnel, compared to 28% in the private sector.

Special account prevents pension fund deficits

The special allocation account (CAS) "pension," which is part of the finance bill, is designed to never run a deficit. This requires annual adjustments to employer contributions to ensure the account remains solvent. The public sector's demographic imbalance, driven by an aging population and more contract workers, has made this challenge more severe, with less than one active worker per retiree compared to 1.5 in the private sector.

Government defends clarity of pension data

The government says the information about pension expenses in ministry budgets was not hidden but was difficult to interpret. The Court of Audit and the Economic Analysis Council previously dismissed claims of a "hidden deficit" but acknowledged the accounting methods were complex. The Institute of Public Policies (IPP) suggested a "legitimate" employer contribution rate of 34.7% for the public sector, though no consensus has been reached.

Civil servant pensions compared to private sector

The government denies that civil servant pensions are more generous than those in the private sector. A study by the Drees found that applying private sector rules to civil servant pensions would result in only a 1.5% increase for the 1958 birth cohort. However, civil servants retired earlier on average in 2025, about one year and two months sooner than private sector employees, due to early retirement options for certain professions.

Pension spending grows compared to other priorities

Pension expenses have grown relative to other public spending areas. Between 2000 and 2023, the share of pension costs compared to GDP increased, while education spending decreased. France’s public spending exceeds the European Union average by about 8 percentage points of GDP, with 2.7 percentage points of that gap linked to old-age expenses. Over the past 50 years, 80% of the increase in public spending has come from social expenses, particularly pensions and healthcare.