October 2023

The supplementary pensions of more than 13 million private sector employees should be increased by 4.9% in November. The unions and employers managing the Agirc-Arrco scheme unveiled on Thursday morning a draft agreement increasing supplementary pensions in line with inflation and removing the penalty system which reduces the retirement of many policyholders.

The result of five sessions of negotiations and discussions extended until early Thursday morning, the text of the national inter-professional agreement (ANI) must still be validated by next Wednesday by the various union and employer organizations to be effective.

The social partners have been in discussions since the beginning of September to redefine the rules of the regime for the period 2023-2026. Main issue of this negotiation: drawing the consequences of the basic pension reform which has strengthened the resources of Agirc-Arrco (22 billion euros over fifteen years).

Sous-indexations

With the wind rising once morest the reform of the basic system, the unions had made the revaluation of supplementary pensions in line with inflation one of their main battlehorses.

“We are on the inflation figure, the last index which was communicated by the government is at 4.8%”, greeted the CFDT negotiator, Yvan Ricordeau. “We can finally benefit those who have made efforts in recent years, such as retirees and workers,” declared CFTC negotiator Pascale Coton.

In recent years, Agirc-Arrco, worried regarding its financial health, had allowed pensions to fall behind inflation via under-indexing. Having returned to surpluses, the regime recorded an increase of 5.12% last year but it was only effective in November, when inflation had already been weighing on budgets for some time. Furthermore, the government announced an increase in basic pensions to 5.2% next January.

All these elements argued for a notable increase in pensions this year. “This allows us to be part of the dynamic of maintaining the purchasing power of retirees,” declared Diane Milleron-Deperrois, the negotiator for Medef. For the following years, pensions may however be under-indexed (by 0.4 points or even 0.8 points below inflation) even if it will also be possible to make them follow the rise in prices.

Union red line

Another important point for private sector employees: the disappearance of the penalty system on supplementary pensions. In force since 2019, this reduces by 10% for three years the retirement of those who take their foot off the gas as soon as they meet the conditions for a full-rate basic pension rather than postponing their departure.

Given the postponement of the legal retirement age by two years, to 64, the unions had made the disappearance of this “solidarity coefficient” a “red line”. The employers agreed to the principle of this extinction without much resistance, but the number of people concerned was the subject of long debate.

Finally, the compromise reached on Thursday provides that the penalty will disappear for future retirees from December. People already affected by a reduced pension will see their penalty disappear in April 2024. There is no question, however, of Agirc-Arrco returning money to these people.

Ceiling for combined employment and retirement

The bonus system must also be maintained for those who have already decided to postpone their retirement in exchange for an increase in their pension.

The social partners also found a compromise so that workers combining employment and retirement acquire new rights in terms of supplementary pension, as provided for the basic pension, with the latest reform. This system will, however, be capped and will not be able to operate beyond 3,600 euros of monthly remuneration.

Stand up to the government

The unions and employers also said they were satisfied with having stood up to the government. They did not provide in their agreement that the supplementary pension plan would help the general plan to make up for its deficits. However, the government has put pressure in this direction in recent days and threatened to use the next Social Security budget to achieve its goals.

These messages were poorly received by trade unions and employers’ organizations, keen to defend the equal management of the supplementary scheme at a time when the government has decided to cut unemployment insurance. At the start of the week, Medef protested once morest the fact that the State wanted to “put its hands on the management of Agirc-Arrco, as it has already done in part on Unédic”.

Work group

Ultimately, the social partners agreed to set up “by the end of the first half of 2024”, a “joint working group” responsible for defining “solidarity measures” for the benefit of only beneficiaries of the scheme and not not modest retirees from other plans.

Not enough to satisfy the CPME, which from the start of the negotiations had called on other organizations so that the scheme participates in an increase in small pensions. “It’s very unfortunate,” declared the employers’ organization negotiator, Eric Chevée. According to him, the government will in any case drain Agirc-Arrco, depriving it of the means to act on possible new solidarity measures.