Agreement signed on early retirement in banking

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In January 2001, a sectoral agreement on "an early retirement scheme for the banking industry" was signed by the AFB employers' association and the banking federations of the CGT-FO and CFTC trade union confederations. This five-year agreement will, through a system of new recruitment to compensate for early retirement, help to mitigate age imbalances in the banking workforce and address demands from workers. The agreement is based on the government's CATS early retirement scheme, which was introduced in February 2000.

Negotiations on early retirement in the banking sector, which were convened in March 2000 (FR0012112F), resulted in the signing of an agreement between the Association of French Banks (Association française des banques, AFB) employers' association and the banking federations of the CGT-FO and CFTC trade union confederations on 15 January 2001.


The five-year agreement enables all companies in the banking sector which wish to do so, to offer either full or progressive early retirement to employees meeting certain conditions. Workers who opt to participate will then be bound by their choice.

Normally, the scheme is open to workers once they reach the age of 58 and remains open for a maximum of two years thereafter. In the case of specific categories of workers - such as those with disabilities or those who have worked at nights or in successive shiftwork - companies may, if they wish, lower the age requirement to 57 or even 56 (resulting in a maximum early retirement period of three and four years respectively). Workers must have been employed by the company for at least 15 years. Actual retirement age is set at 60 or later (within the stipulated maximum period). When they leave the scheme, workers must then meet all the required criteria to be eligible for a full pension.

The full early retirement allowance varies - according to factors such as the length of the period of early retirement - between 57.5% and 65% of the employee's previous salary. If employees opt for progressive early retirement, they receive pay equivalent to working half-time hours, supplemented by a state allowance of between 30% and 25% of their basic salary (depending on their salary level), producing a total income of between 75% and 80% of their previous salary.

New recruitment is planned to offset early retirement. At least 30% of those taking full early retirement will be replaced by a full-time new recruit (or the equivalent thereof), while one new recruit will be taken on to replace every four employees taking progressive early retirement. Despite the fact that banks normally require two years of post-secondary education, at least 50% of new recruits taken on under the progressive early retirement scheme will be from the priority groups identified in the government's employment policy or from people on youth employment schemes (FR9709163F).

Over five years, around 20,000 employees - representing 10% of the banking workforce - will be eligible to take full or progressive early retirement.

Union reaction

AFB considers the agreement to be "prudent, given the problems facing pension financing, and one that allows companies a large amount of flexibility". Half of the employees of AFB-affiliated banks – which account for 70% of the total banking sector workforce - are aged 45 and over, and the average employee age could be close to 50 in 2006. For the banks, the aim of the agreement is to develop a transitional scheme that will help to smooth out changes in the sector's demographic age profile by spreading the retirement dates of the many employees born in the post-Second World War years

The banking sector federation affiliated to the CGT-FO union confederation stated that it had signed the agreement "despite the fact that it did not address all union demands" in an effort to "meet the strong demands of the workers concerned". It maintains that "the agreement by banking employers to set up a sectoral early retirement system flies in the face of the resolve of MEDEF [the employers' confederation] gradually to increase the retirement age to 65". Lastly, CGT-FO signed the agreement on the condition that the funding from the Financial Structure Management Association (Association pour la gestion de la structure financière, ASF) for supplementary pensions for those retiring at 60 be maintained. "If supplementary pensions for this group were to be cut - as proposed by MEDEF (FR0102132F) - CGT-FO would quite simply withdraw its signature from the agreement". CFTC signed the agreement with the same provisos as CGT-FO.

The three remaining trade unions - CGT, CFDT and SNB-CGC- have "postponed their decision" on signing the agreement for several reasons. In the light of the current stalemate in the intersectoral negotiations on supplementary pensions (FR0102132F), they believe that "today's agreement is likely to be outdated tomorrow". Moreover, given the "very strong pressure from workers, eligibility for early retirement at 55 appears to be a fundamental demand that has to be addressed". Lastly, these unions consider that an allowance set at 57.5% of previous pay for those taking early retirement at 56 "does not provide sufficient income", and that "at least two new recruits should be taken on for every worker taking early retirement, especially to promote youth employment".

New Sector-level Early Retirement Agreement

The banking agreement is the seventh sectoral agreement to have been signed within the framework of the "early retirement for certain employees" (cessation anticipée d'activité pour certains travailleurs salariés, CATS) scheme set up by a February 2000 decree. This system, when implemented by sector and company-level agreements, makes specific workers eligible for full or partial early retirement from the age of 55, for a maximum of five years. The conclusion of a sectoral agreement on the issue makes companies completely exempt from employers' social security contributions on the allowances paid to the workers concerned.

Under the scheme, the state covers part of the early retirement allowance when employees reach 57 if they meet specific criteria, such as 15 years of successive shiftwork or production-line service, or no fewer than 200 night shifts a year over 15 years, or if they are disabled. The portion covered by the state is incremental, based on the age of the employee when he or she entered the scheme (standing at 20% for those entering at 55, 35% at 56 and 50% at 57 and over). The companies involved are required to have implemented a 35-hour working week (FR0001137F), and to have put in place measures aimed at managing employment in a forward-looking way, developing employee skills and helping workers adapt to changes in their jobs.

Unlike the other six sectors which have introduced such early retirement schemes - the automobile industry (FR9908103N), part of the food sector and the paper, quarrying, raw materials, chemicals and writing implement industries - where the rationale was largely to shed staff , the banking sector is committed to renewing its workforce both on a quantitative and qualitative level on the grounds that it considers some of its employees ill-adapted to developments in new technologies. The minimum eligibility age, at 58, is higher than the 57 laid down in the six other agreements.

Those companies now wishing to implement the banking sector agreement will have to negotiate a company-level agreement and make the required arrangements with the Ministry of Labour.


The agreement reached in banking is the first agreement on the CATS early retirement scheme in the service sector. The insurance sector, which is undergoing similar changing skills requirements, is experiencing the same demographic problems.

This agreement re-establishes a banking sector early retirement system. Early retirement was available to workers until 1994 (at the age of 58 for men with 40 years service and at 55 for women with 30 years service). This scheme was entirely funded by the banks themselves. Consequently, the potential government funding for the new scheme is an innovation in the banking sector.

The agreement, which was signed by two unions, will come into force on 1 April 2001. However, implementation depends on the current intersectoral talks between trade unions and employers' associations on supplementary pensions. (Annie Jolivet, IRES)

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