In 10 February 2001, an agreement on reforming France's supplementary pensions schemes was signed by the MEDEF employers' organisation and the CFDT and CFTC trade union confederations. The CGT, CGT-FO and CFE-CGC unions opposed the accord, and uncertainties remain over its interpretation and implementation.
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In 10 February 2001, an agreement on reforming France's supplementary pensions schemes was signed by the MEDEF employers' organisation and the CFDT and CFTC trade union confederations. The CGT, CGT-FO and CFE-CGC unions opposed the accord, and uncertainties remain over its interpretation and implementation.
During 2000, intersectoral negotiations occurred on private sector supplementary pensions, one of the themes the social partners had agreed to discuss as part of the "industrial relations overhaul" process launched by the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF) employers' confederation (FR0002143F). In the talks, MEDEF proposed increasing the retirement age, extending the contribution period required for eligibility to a full pension and rejecting any future increases in contributions (FR0102134F).
In an attempt to reinforce its position, MEDEF threatened not to renew the agreement on the Financial Structure Management Association (Association pour la gestion de la structure financière, ASF), which expired at the end of 2000. This body funds supplementary pensions paid out to workers between the age of 60 and 65. On 21 December 2000, the trade unions expressed their rejection of MEDEF's demands. Consequently, MEDEF immediately carried out its threat and called on companies to suspend their ASF contributions. The unions put up a united front, culminating in major protests on 25 January 2001 (FR0102132F). MEDEF then suggested a final meeting, at which an agreement was finally hammered out between the employers and two union confederations, CFDT and CFTC.
The agreement reached on 10 February 2001 covers the following three areas:
it sets out four principles to be followed by parliament in overhauling the basic pension system. First, "stabilisation of contribution levels for the next 10 years without pre-empting the use of additional connected deductions". Second, "prioritisation of variable contribution periods". Third, fostering "freedom of choice" in terms of retirement age "from 60 onwards." Fourth, allowing retirement before 60, with the people concerned receiving their basic pension (under circumstances and conditions yet to be defined);
it extends the current provisions regarding supplementary pension schemes until the end of 2002, while the general supplementary scheme, ARRCO, and the management and professional staff supplementary scheme, AGIRC, are to be "merged" before the end of 2002. These schemes are to be overhauled once the legislative reform of the basic social security pension system has been completed; and
an Association for the Management of Funds Financing AGIRC and ARRCO (Association pour la Gestion du Fonds de Financement de l'AGIRC et l'ARRCO, AGFF) is to be set up to replace the ASF. This new agency will start accepting contributions from April 2001. This means that companies will be exempt from making ASF contributions for the first quarter of 2001.
The CGT union confederation rejected this agreement immediately. It believes that by fostering longer contribution periods, without providing for any extra financial resources for the supplementary scheme, the agreement is tantamount to a challenge to the principle of retirement at 60.
CGT-FO and CFE-CGC were not quite so quick to reject the agreement. They seemed to deem some provisions satisfactory, but MEDEF had ruled out any possibility of partial signature of the deal. CGT-FO and CFE-CGC mainly took issue with the notion of demanding the overhaul of the basic pension scheme by parliament and dictating the criteria and schedule for such reform.
CFDT and CFTC, both signatories to the agreement, preferred to focus on the guarantee to pay out supplementary pensions at 60 until 2003. In the view of CFDT, the reference in the agreement to the possibility of retirement before 60 means that its demand for "à-la-carte retirement" has been taken on board. The union refuted the argument that the contributions and other resources necessary to pay pensions could not be increased.
Differences of interpretation of the agreement were rekindled when an internal MEDEF report setting out the organisation's own interpretation was disclosed. Unlike the arguments used by CFDT and CFTC in justification of their decision to sign on to the agreement, MEDEF believes that the only variable that can be adjusted to address future requirements is the contribution period. Moreover, MEDEF sees the new agreement as ushering in the merger of the basic and supplementary pension schemes. CFDT is the only trade union advocating this measure. The other signatory union, CFTC, which was quite disturbed by these different interpretations, also rejected the ASF contribution exemption for the first quarter of 2001. The retroactive implementation of this provision would seem to be problematic since some companies have already paid their contributions. Furthermore, government clearance is required before the new AGFF body, which is designed to guarantee funding for pensions starting at 60, can be set up. The creation of the agency could therefore be delayed.
Eurofound recommends citing this publication in the following way.
Eurofound (2001), Agreement reached on supplementary pensions, article.
