The New Caledonian government has adopted several measures to bail out the Local Pension Fund (CLR), responsible for paying the pensions of territorial civil servants, which risks cessation of payments on Wednesday September 13. The Fund is in a “state of absolute emergency”, writes the New Caledonian government in a press release.
The executive wants to gradually increase contributions for civil servants and employers by 1%, which should generate nearly 8 million euros in new revenue per year. Pensioners will also be affected with a “reduction rate” which will increase from 5% to 6%, for an expected saving of around 1.68 million euros annually.
The threat is serious. In the absence of immediate action, the CLR might not have been able to pay pensions to its 5,600 beneficiaries by the end of the year. Each month, the structural deficit, estimated last July by the Fund at 14.3 million euros, worsens by almost a million euros.
The CLR faces unpaid debts of more than 12 million euros
In addition to the structural deficit linked to the constant decline in the civil servant/pensioner ratio which has gradually deteriorated since the 1990s to reach 1.76 as of July 31, 2023, the CLR is facing unpaid debts: in total, communities and public establishments − including public hospitals − owe him 12.6 million euros.
Despite everything, all of these measures, which must now be approved by the Congress of New Caledonia, “risk not producing positive effects quickly enough”, specifies the New Caledonian government which has therefore “requested the ‘State financial aid which, combined with emergency measures, would ensure the payment of pensions until September 2025.’
Last week, on the sidelines of discussions on the institutional future of the territory, the Minister of the Interior and Overseas Territories, Gérald Darmanin, confirmed the State’s desire to support Caledonian communities in difficulty.
The sustainability of the pension system beyond 2025 is also the subject of discussions with the social partners. The unions point to the massive recourse by communities to contractual agents, who therefore contribute in the private sector, instead of civil servants, as an obstacle to the restoration of healthy finances.