French ministry releases detailed pension budget annex

The French Ministry of Public Accounts has updated its annex to the 2027 budget, providing a detailed breakdown of how much of the budget is allocated to pensions, employer and employee contributions, and mixed contributions. This document aims to clarify how much of the budget is used for public services versus pensions.

Release occurs amid budget and social tensions

The publication of this "yellow budget" document comes at a time of ongoing budget debates and a volatile social environment. While the ministry has previously shared information on pension spending in budget annexes, this year's document goes further by aggregating pension contributions from the state as both an employer and employee at the level of each ministry.

Context of government challenges and protests

The release coincides with a series of setbacks for the government regarding pension spending in the proposed finance bill and the Social Security financing bill. The executive also faces protests from students over a lack of teachers and resources, showing the link between social spending and public policy funding.

Pension spending has an "eviction effect"

The annex notes that pension expenditures in each ministry have an "eviction effect," meaning these funds do not finance public services. The report, prepared months in advance, was published during the usual autumn budget cycle. Minister David Amiel had previously stated his intention to clarify, ministry by ministry, which expenditures support current public services and which support pensions.

Education Ministry has the highest pension spending

The Education Ministry has the highest proportion of pension-related expenditures. Of 89.1 billion euros allocated to the Ministry of National Education, 84.6 billion are personnel expenses, including 25.1 billion in employer pension contributions (28% of the allocated credits) and 3.4 billion in employee pension contributions (4% of the allocated credits). Over a third of the ministry's salary bill finances the pension system.

Other ministries also heavily fund pensions

The Ministry of the Interior is also significantly affected, with 30% of its credits contributing to public sector pensions. Other ministries have lower proportions, such as Higher Education and Research, Justice, and Public Accounts, which contribute around 17%. Agriculture contributes 11.5%, close to the average for ministries, while Culture contributes 5.5% and Sports 3.5%.

Ministries do not fund pensions for their former employees

It is important to note that each ministry does not finance the pensions of its own former employees. The high pension expenditure is due to significant personnel costs, with the Education Ministry and the Interior leading in this regard.

Public sector has a higher employer contribution rate

The high share of pension expenditures is due to the high employer contribution rate in the public sector, at 82.3%, significantly higher than in the private sector. This results in pension contributions making up about 40% of the total remuneration of a civil servant and 50% for a military personnel.

Demographics, not benefits, explain contribution differences

The difference in contributions is explained by demographics, not the benefits paid. The ratio between contributors and pensioners is 0.94 in the public sector, compared to 1.5 in the general regime. This ratio has worsened due to an aging population and changes in the status of public sector workers.

Report challenges perception of better civil servant pensions

The report challenges the common perception that civil servants receive better pensions than those in the general regime. According to the Drees, applying the general regime's calculation rules to civil servants would increase their pensions by an average of 1.5%.

Report highlights financial challenges for the pension system

One and a half years after controversies over the real deficit of the pension system, raised by former Prime Minister François Bayrou, the recent report attempts to present the situation differently. It distinguishes between contributions comparable to common regimes and those representing a "balance subsidy."

Government communication faces criticism

The government's communication on the report has already sparked reactions in the National Assembly. Sénatrice PS Monique Lubin criticized the government for continuing to spread this narrative. During questions to the government, Deputy Pierre Cazeneuve (Renaissance) cited the Education Ministry's expenditures, stating that a third of the budget is not for children but for paying pensions, and that the public should be outraged.