Transfers to the government of public corporation pension liabilities: The French case study.

Lump sum payments in compensation for the transfer to the Government of pension liabilities are one of the main categories of one-off budgetary measures that have developed in Europe over the recent years. These operations have been the most frequent in France, because of the various special employer schemes existing in the public sector. As pension systems and accounting standards are being reformed and former public companies are being privatized, adjustments seemed necessary. The paper studies the treatment of such measures in national accounts and reviews the different transactions implemented in France since 1997 and the various impacts on public finances. It assesses the risk of budgetary losses for the French government due to unexpected developments in the different parameters used for the calculation of the lump sums. Stress tests show that these risks are very limited, especially with the perspective of an increase in the contribution period that will apply to all pension schemes. Moreover, these operations were a prerequisite for a reform of the French public sector, enabling the deregulation of markets and increasing potential output in the medium term. [ABSTRACT FROM AUTHOR]