Pension reforms. Why is the debate constrained to raising the retirement age or not, with no intermediate solutions?

Question

This question was inspired by the French pension reform, but also in other European countries the situation is not different. The debate seems framed between the two extremes. Increase or not the retirement age. I never heard about proposals or studies whether intermediate solutions could help. There could be for example part time work after a certain number of years of contribution. Or it could be reduced contribution after a threshold to make older workers more employable. It could also be mandatory transfer to less demanding roles for demanding jobs for which there is a lower retirement age.

Anyway what I cited above are just examples. My question here is why the arguments are: raise the retirement age or not, nothing else.

Note. While the media draw a lot of attention on workers that for one reason or the other work for the government and their jobs are safe a big part of the problem and the protests are old workers in the private sector who remain unemployed in their late fifties and will not have a stable income until the retirement age.

Answer 1

To quote some World Bank slides:

Pension Reform Policy Options:

1. Refinancing:
   • Increase payroll tax base or rate
   • Add additional earmarked revenues or general taxes
2. Retrenchment:
   • Reduce benefits (e.g., change indexation)
   • Reduce eligibility (e.g., raise standard retirement age)
3. Restructuring, e.g.:
   • Add (or substitute) defined contribution tiers
   • Add automatic balancing mechanisms (NDC)
   • Add “boundary straddling” automatic stabilizing mechanisms

...usually tried in roughly that order

Generally speaking people on the center-right don't like to pile up more/higher taxes/contributions. And also generally speaking, people don't like their benefits cut, but that did happen e.g. in Greece, simply because cutting pensions in half has no real substitute in terms of raising the retirement age.

As for the last part (3), it's complicated to add multiple layers of contributions etc. Generally speaking it's the poor[er] who pay more of their income towards pensions anyways. And in NDC [Wikipedia]

Unlike in PAYG pension system, there is no guarantee that the worker can expect decent pension in his retirement, since it is based solely on his contributions and the notional rate of return.

Anyway, going back to the World Bank slides, there's this arguing against the more complicated schemes:

Stealth mechanisms for loss imposing pension reforms [suffer from lack of] Clarity--if workers are to adapt successfully to new pension policies, they must be given clear signals early about changing their savings and retirement behavior.

While France is largely a PAYG country, its system is already using various tiers etc. Yeah, they could tweak those and make just some people worse off. But what happened when some people in France thought they were unfairly targeted by diesel fuel taxes? [A: Years of protests.]

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My question here is why the arguments are: raise the retirement age or not, nothing else.

That seems to be the most contentious issue, and traditionally has been so, see e.g. 2010 protests, but it's hardly the only measure that was considered/included, although I only found this bit in English from January, so I don't know how much of it made it to the final law:

"Another key measure that the government is counting on to get the reform accepted is the increase of the minimum pension for low-income workers who have a full career to 85% of the net minimum wage, i.e. nearly €1,200 at present. A measure extended to current pensioners. "Nearly two million small pensions will be increased," said Elisabeth Borne." [...]

"More than ten years after the abolition of the gradual cessation of activity, the government announced the return of a system of gradual retirement in the civil service, "on the same principles as the existing system for employees and the self-employed," according to a government press kit. We will allow civil servants "to go part-time two years before the retirement age", i.e. from the age of 62, said Ms. Borne."

Answer 2

There could be for example part time work after a certain number of years of contribution. Or it could be reduced contribution after a threshold to make older workers more employable.

Your proposed solution is to increase the retirement age, with extra steps, but worse. Not pension (no free time), and also not money. Not only that your proposal is bad, but it is additionally offensive - and that is why nobody has the guts to propose it.

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Additionally

Besides government employees and people "unemployed in their late fifties", there are other people affected, in several ways. The main issue is that the retirement age is already frighteningly close to the life expectancy. Pushing the retirement age even further practically cancels retirement. And this is true even before we consider health issues and other details.