Joint macro/micro evaluations of accrued-to-date pension liabilities: an application to French reforms

Accrued-to-date liabilities (ADLs) could soon add to the set of regular statistics on public pensions, in compliance with updated SNA provisions. This raises two questions: how can this indicator be produced, and what for? Microsimulation is shown to constitute a relevant answer to the first question. Despite its stochastic nature, it displays results that seem stable enough for accounting purposes. Concerning the “what for” question, it is well-known that ADLs are not an indicator of global financial sustainability. Their message is more interesting from the household perspective and especially at the micro level. This fosters the case for microsimulation that automatically produces consistent micro/macro results. All these macro and micro properties are illustrated in the French case, with applications to the assessment of the successive 1993, 2003 and 2010 reforms that have modified entitlements in rather complex ways, differentiated across cohorts and skill levels.