Group of European Pensioners from Savings Banks and Financial Institutions


Index of documents > Reports and communications > Salou '04




In the number 26 of the CNR reports we have denounced the new table of rates determining the usufruct value and the bare legal title to be applied in case of an inheritance free of charges.

The usufruct’s imposable value is fixed collaterally and corresponds to a fraction of the whole property’s price, depending on the usufructuary’s age. For example: let’s imagine this usufructuary is between 71 and 81 years old; the usufruct’s value represented up to now 10 % of the possessions in question; but since 1/1/2004 this value is equal to 30%.

Through this measure, the Public Finance intends to favour gifts affecting bare legal title; but heavily punishes the surviving spouse with an increase of the inheritance rights between spouses. We must specify that the most affected will be the substantial inheritances, but not only these. Let’s take as an example, which is yet significant, a one million euros inheritance (main residence, PEA, etc), without any doubts; before the reformation, the surviving spouse paid the tax authorities 2470 €; since 1/1/2004 this amount rises up to 42170 €, in other words: 17 times more.

In this measure we can find a formal contradiction because it strengthens the surviving spouse’s rights (law belonging to December 2001) and conceding an automatic usufruct.

The minister replies that the reformation is “generally” neutral and not heir per heir…

This is absolutely not clear. Taking into account that the problem is complex without doubts, every person concerned should be widely advised by notary; this attitude seems useful to us.

Without any doubt, in order to resist the taxable wealth’s growth, increasing the current exemption should be necessary in order to reach between 76000 and 100000 €, but the Public Finance has turned down this possibility.

We would like to insist again in the need of suppressing the inheritance rights between spouses because this tax is especially unfair. The CNR with the CFR is going to increase its interventions to obtain this aim and states satisfactorily that this solution is supported by a Member of Parliament.

We truly agree with him…



During these last years, several countries belonging to the OCDE zone have undertaken reforms and created reserve funds earmarked for financing previously a part of the obligations linked to the State’s distribution systems.

Ireland, Netherlands, Spain, Portugal, Norway and Sweden as well as France have chosen to create a reserve fund by adopting administrative and financial management rules, taking into account its budget and the structure of its respective pension systems.







Since long ago, Sweden and Finland had accumulated reserves in the distribution system. On the occasion of the reforms introduced in the pension systems, these countries have basically modified this reserve fund’s management rules in order to be more efficient.

The reserve accumulation in the distribution system and the optimization of their financial management have become preponderant facts in the pension systems’ reformation process. These reserve funds are destined to make the public finances sustainable in a horizon covering at least two or three decades; but to carry out this plan, it is essential to reduce as much as possible the State’s budget deficit making as bearable as possible France’s budget discipline. The reserve fund’s efficiency will depend to a great extent on the State’s capacity to accumulate during two decades a significant sum able to act as a buffer considering the importance of the appraisable financing need will be about 45,73 thousand million euros per year since 2015…

It is important for us to remember the main characteristics of the European Countries’ pension systems including the undertaking reforms and the casual particularities of each reserve fund.




-          Lawful age for the activity cessation, 65 years old.

-          Real age for the activity cessation, 62 years old for men and 61 years old for women.

The pension system is formed by two levels: the State’s basic distribution system and the professional complementary systems functioning in the capitalization system, but the Netherlands have not started the fundamental reform in their pension system.

The State pays non-contributory pensions to the residents over 65 years old. The sum varies depending on the spouses, their age and their residence life time in the country.

The contribution, 17,9 %, only encumbers those insured under 65 years old. There is no benefit from the companies.

The contribution group is formed by the income’s first step in the scale of the maximum tax of 26980 € in 2001, in other words 176977 francs. All the incomes, included the incomes coming from the capital and the patrimony contribute to finance the basic public system, excepting tax payers under 65 years old who are not subjected to tax return.

State’s GDP benefit in %:  4,8% in 2000, 5,4% in 2010, 7% in 2020, 10,2% in 2040.

Reserve funds: These funds were created in order to finance in advance a part of the state’s obligations. They have no legal autonomy.

The fund only invests in government bonds and the law specifies that they can’t be used before 2020.

The reserve fund is nourished by the result of the Public debt’s reduction; it is a fact of budget discipline because the sums destined to the reserve are immediately used to increase the Public expenditure.

In 2002 the reserve fund will have accumulated 12,7 thousand million euros; in other words 2,8 of the DGP and a 7 month benefit. 





According to the support rule of the reserve funds includes an increasing sum year after year, the funds’ payments will have to be equivalent to 0,8 GDP points in 2005; one GDP point in 2010.

In 2020 the fund must reach 16 GDP points, in other words, 2,3 years of benefits.




The State’s basic pension system pays two types of distribution benefits:

-          The contributory pensions depending on the quotation’s length of time cover 2 types of benefits. On one hand the old-age pensions paid after 66 years old, and on the other, the retirement pensions paid after 65 years old but only when they accomplish the length of time of the standardized quotation conditions. The financing remains assured by means of the quotations coming from “employers and employees”.

-          The “non-contributory” old-age pensions financed by the state’s budget and paid depending on the resources and residence’s conditions. No matter its origin, the individual amount of the pension is subsidiary.


Pensions in GDP %: 4,6 % in 2000, 5% in 2010, 6,7% in 2020, 8,3 % in 2040.

The national debt has been divided into three between 1990 and 2002 in order to reach the 33,7% of the GDP.

After 2025 the budget deficit and the indebtedness should appear again. Because of its demography and economic achievement Ireland should have two decades to face the aging costs.

It was in this context, where the reserve fund for retired people was created in 1999. This fund increases every year with the GDP (in other words a thousand million euros). This fund cannot be used but after 2025. And it will be nourished until 2055.

After 3 years the reserve fund shows a 7,7 thousand million euros’ accumulation, what is to say 6,7 GDP points.

From 2025, the reserve fund must permit the stabilization of the pensions’ costs between 5 and 6 GDP points.




The Finnish public system is formed by two levels:

-          The State’s distribution system with subsidiary benefits under the sufficient resources and extended to all the residents over 65 years old.

-          The second level includes a compulsory contributory distribution system for  9 professional branches with pensions depending on the employees' professional life.


In 2001 the pensions paid by the compulsory systems represented 11,2 GDP points.

The second level pays three quarters of the pensions.


GDP pensions in %: 11,3  in 2000, 11,6 % in 2010, 14% in 2020, 16% in 2040.






Particularity: The second level’s systems are partly provided by the old-age, disability and unemployment insurance after 60 years old.

The obligations until 65 years old are provided up to 80 %.

Since 1995 some reserves were created using the retirement system’s surplus.

At the end of 2001 the amount of accumulated reserves reached 69000 million euros, in other words the equivalent to 7 years of benefits.




All the persons living in Norway and having a professional activity are compulsory insured by the NIS (National Insurance Scheme), created in 1967, to work on subjects such as old-age, disability, etc…


Concerning retirement, the NIS covers all the State and private employees and those unemployed (financing assured by the State). The pensions are financed by the distribution system (quotations) and by means of a part of the State’s budget.


Structure of the public retirement system:


-          The lawful age for retirement (women and men) is fixed at 67 years old. But it could reach 70 years old.


The retirement system is formed by two levels:


-          The first level is the universal system, which pays a subsidiary pension to the residents who have quoted for at least three years. The amount is independent from the former income level and from the paid quotations.

-          The second level is a complementary system with defined benefits; the pension is calculated on the part of the salary that is higher than the basic amount. The insurance will last 40 years. The average pensions’ amount is calculated from the points belonging to the best 20 years, and a 42 % payout rate.


The civil servants have special conditions: they are guaranteed the 66% replacement of their last salary when having finished a thirty year work period. These expenditures financed by the State’s budget by means of a contribution coming from those insured.

GDP pensions in %: 7% in 2000, 9,2% in 2010, 12,5% in 2020, 15,8% in 2030.


Considering the possible decrease of the oil resources, Norway created in 1990 the “Petroleum” fund meant to accumulate reserves in the next generation’s benefit, and in order to preserve an equivalence between generations in the assignment of the incomes generated by the oil resources. These resources are formed by the tax payout transfer, which amount is yearly fixed when defining the State’s budget, to what the financial inversions’ incomes are added.








Evaluation of the Holdings at the end of 2001: 613,7 thousand million crowns: the equivalent to 42 GDP points. The Holdings already permits to provide almost the total amount of the complementary systems’ obligations.




-          Lawful age for retirement: 65 years old (women and men).

-          Real lawful age for retirement: 63 years old (women and men).


The reform finished in 2001 has carried to the creation of two totally contributory systems:


-          A distribution system based on defined quotations following the notional accounts’ techniques or the pension calculated by means of the contributory effort and the length of time of the pension’s service : minimum pension, 740 €; quotation following the 18,5% rate on the gross salary  (16% for the distribution).

-          A system for personal saving accounts for retirement by means of capitalisation quoting a 2,50% rate.


The new system started in 1999 only covers the old-age insurance; the rights acquisition for retirement is only based on the activity and replacement incomes. The pensions’ reform will become totally effective in 2014.


GDP pensions in %: 9% in 2000, 9,6% in 2010, 10,7% in 2020, 11,4% in 2040.




Already in 1960 while the old retirement system was effective, Sweden accumulated reserves destined to damp of the conjuncture’s impact on the system’s financial balance. At the end of 2000, the reserves reach 735 thousand million crowns (35 GDP points).


The transfer of a part of the State’s reserves to the budget: one of the principles of the retirement system’s reform in 1999 was to create a new retirement system in order to insure exclusively old-age as a unique risk. This measure provoked the transfer of the non-contributory’s financing to the State’s budget. Four new funds have been created, each of them has the same amount of reserves that permits a safe management of the pensions in the future, if necessary.













Even the Swedish reform seems to be revolutionary, in fact it is not a good example to follow. Following some experts, such as Mr. Söderström, KPA/BA office’s consultant, the new retirement system started in January 2001 will reduce the main part of the citizens’ pensions, because the only aim fixed is to ensure the financial stability in the long term. The whole risk exclusively goes from the businessmen to the Government to the employees. The Government can reduce the pension’s amount until the balance between quotations and benefits is re-established. The pension drop will be obvious for the civil servants whose new system lies on a mixture of defined benefit/ defined quotation. The system’s complexity makes its comprehension difficult for a high number of the Swedish population.




In 1997 Spain reformed its system for social protection. The new organisation’s main principle has distinguished two types of benefits: the contributory benefits, which amount depended on the financed or quoted (private) remunerations; and the non-contributory benefits financed by the State’s budget.


The demographic reliance’s rate should double in the next forty years; this would provoke an increase of more than 7 GDP points on the pensions.


The quoting rate is of 28,3 % in the universal system and is applied to the highest salaried scale.


GDP pensions in %: 9,4% in 2000, 10,2% in 2020, 16,9% in 2040.




Created in 1997, it is nourished by means of the systems’ surplus paid by the contributory benefits. This reserve fund started its increase only since 2000. In 2002 it represented approximately 2,9% of the GDP.




Between 2000 and 2002, Portugal has adopted three types of measures in order to reorganise the social benefits:


-          Difference and separation of the functions of “insurance” and “solidarity”. The State assumes the solidarity expenditures.

-          The reform of the types of acquisition and payout of the rights for retirement in the universal system.










-          A reserve fund was created thanks to the National Insurance’s surplus accumulated since 1989.


The annual contributory and universal system covers the private branch employees and those unemployed in the “old-age”: quotation rate is of 34,76%, when the lawful retirement age is 65 years old as long as they have been quoting during 40 years, with an 80% gross quotation rate.


Since 2001, the reference salary has been determined by the whole working life and the pension is calculated following a table of rates of a decreasing annual rate depending on the salary. The civil servants’ system had better conditions (equivalence rate 100%) but it was reformed in 1993 and, as a result, the new civil servants were subjected to the same rules applied in the universal system.


GDP pensions in %: 9,8 % in 2000, 12% in 2010, 14% in 2020, 16% in 2030.


Reserve funds


Created in 2000 in order to finance in advance the universal system’s pensions. A financiation between 2 and 4 quoting point is expected as long as the universal system has no deficit, in other words, until 2017. Since this date the reserve fund should reach 10,6 GDP points. The reserve fund should allow to balance the quoting rates at least for the next 30 years.




Generally, these reserve funds have permanent resources. In addition, they are tightly linked to the State’s finance policy in the long term and strengthen the budget’s discipline.

We hope the same changes take place in France and that the amount of the reserve funds allows to face the important deficits expected from the retirement systems. In this way it could reach 19000 million euros at the end of 2004.




In a next occasion we will compare the retirement policies carried out in Germany, Italy, United Kingdom and United States.

















The Foreign Affairs European Ministers will try to come to an agreement in Brussels in what has to do with a statute project which has no more aim than to harmonize the European delegates’ goods and introduce a single gross salary stipulated between 8500 and 9000 euros per month.

Currently the wage levels goes from 2500 euros per month for the Spanish delegates to 12000 euros for the Italian delegates who are the best paid.



According to BIT, in 2003 the rate of unemployed population indicated there were 185,9 million persons searching for a job, in other words 6,2% of the total working population; approximately the same level obtained in 2002 (185,4 million persons)



Last 26th of January, those representing 7 trade union federations of civil servants a number of meetings with the Ministry of the Interior about the additional retirement system based on the civil servants’ premium. This system will be a “compulsory distribution system, affecting all the civil services and will be applied since 1/1/2005 for a 40 year period”.




Repurchase of the education period

Since 2004 the employees and civil servants will be able to “purchase” up to three years used for education (12 periods of three months). This purchase will increase their quotation when perceiving old-age pension.

Private branch’s salaries: the cost belonging to the three months period will be:

20 years old: 1670 €

40 years old: 3500 €

59 years old: 4050 €


The education period must have concluded with a Degree.

For the civil services the amount will depend on the salary.


Bank accounts

 In 2003 the banks and their clients have opened 4 million accounts.


Toyota vehicle

In France a new Toyota vehicle is manufactured in only 14 hours.



When the 35 hour law comes into force, 42% of the employees consider having less time to carry out the same tasks.


Business lunch

Its length of time has been reduced if we compare it with 1975. Currently, the lunch break lasts about 49 minutes.



In Public Works a third part of the staff over 55 years old is not working: 19% is unemployed, 10% is disabled and 5% is on a sick leave.