The government wants to drain part of the supplementary pension scheme funds to replenish the general scheme. Employers and unions are fiercely opposed to it.
The government and social partners are once again divided on pensions. This time, it is not on the increase in the legal age of departure that the debates are focused, but on the complementary funds of Agirc-Arrco, which concern private sector employees. The unions and employers are opposed to the payment of part of the surplus from this fund to the general pension system, as desired by the government, which could force them to do so. While the examination of the budgetary texts in the National Assembly continues on Monday, October 16, which could make this transition a reality, franceinfo dissects this multi-billion euro battle.
The government wants to balance the system via Agirc-Arrco surpluses
Schematically, there are two components for retirement pensions: basic pensions and supplementary pensions. In the private sector, supplementary pensions are grouped together in the Agirc-Arrco scheme. It is managed by the social partners, in an equal manner, that is to say by the unions and the employers. It is the coffers of this regime that the government is eyeing today. Indeed, Agirc-Arrco prides itself on having a comfortable cash flow, with “68 billion euros in reserves and 0 euros in debt”. It still achieved 5.1 billion euros in surplus in 2022, and pays, each year, around 87 billion euros to some 13 million private sector employees.
The general system is in a less good situation: the Pension Orientation Council (COR) anticipates a system still in deficit in 2030, despite the pension reform enacted this year. The government also announced at the end of September that a 5.2% increase in retirement pensions on January 1, 2024, at a cost of 14 billion euros for state finances.
It is therefore to help the general system that the government asked the unions and employers in September to return part of the Agirc-Arrco surpluses. “When a pension plan, and in this case the supplementary plan, generates surpluses and part of its surplus is intrinsically linked to the reform put in place, we consider it normal that there is participation in the ‘general balance of the retirement system’, defended Olivier Dussopt, Minister of Labor, at the end of September, in front of journalists. The government explains that Agirc-Arcco benefited from new revenues brought by the pension reform, estimated at 22 billion euros over 15 years.
Unions want to use the money for support measures
The government’s initiative came while the social partners were around the table to negotiate an agreement on the management of Agirc-Arrco over the period 2023-2026. They decided to unanimously refuse this request from the executive.“Any surpluses come entirely from contributions from employees and companies, and even if it is true that the pension reform is mechanically at the origin due to the increase in the legal retirement age (…), It would in no case be admissible for the government to divert these sums to finance expenses which are due to it.”swept away the Confederation of Small and Medium Enterprises (CPME).
“This is the money of employees in the private sector, dedicated to their supplementary pensions, managed by trade unions and employers’ organizations, so the State has no say in this part”also rejected the general secretary of the CFDT, Marylise Léon, on France 2 at the beginning of October.
The agreement concluded between unions and employers for 2023-2026 also provides for an increase in supplementary pensions of 4.9% on November 1. It is in particular to finance this increase that Agirc-Arrco refuses to have part of its reserves taken from the general system.
In addition, the agreement includes the elimination by spring 2024 of a 10% penalty which had been put in place to encourage employees to stay longer at work before asserting their retirement rights. In other words, in the eyes of the social partners, Agirc-Arrco will need its copious reserve in the coming years to avoid finding itself in the red with these increased expenses.
The government threatens to take force
For its part, the government is increasing the pressure and criticizing the social partners for having initiated “new expenses” who put “endangering the balance of reform” pensions, in the words of the Minister of Labor, Olivier Dussopt. “We placed our trust in social dialogue and today, we regret that the social partners did not take into account this necessary responsibility for our public finances”launched the minister before the National Assembly.
“This agreement unbalances the public accounts by a billion euros, which we will have to respond to.”
Olivier Dussopt, Minister of Laborin the National Assembly
During the report of the Council of Ministers on Wednesday, government spokesperson Olivier Véran also denounced the choice of the social partners to use the surpluses resulting from the pension reform “to spend more money to increase the level of supplementary pensions for executives”at the risk of “penalize the financing of our schools, our hospitals, our public services”. Down to the last detail, as specified The echoes, that the Agirc-Arrco regime does not only concern executives, but all private sector employees.
The government therefore wants to regain control and take between 1 and 3 billion euros per year from the coffers of Agirc-Arrco. To do this, the Ministry of Labor could drain the treasury of this supplementary scheme via an amendment, during the examination of the finance bill (PLF) or the social security financing bill (PLFSS) for 2024.
The opposition vetoes
In this standoff between government and unions, the opposition has chosen its side. “Let’s not let the government plunder supplementary pensions”launched Marine Le Pen on October 5 in a column published by Le Figaro. At the National Assembly last Tuesday, the left, the National Rally and the Republicans asked Olivier Dussopt to“give up” this puncture project which makes “unanimity against him”. “These surpluses do not belong to the State, nor to the unions, nor to employers. These surpluses are the money of employees who have contributed all their lives”thundered MP LR Nicolas Ray.
“Touching the Agirc-Arrco reserves without the agreement of the social partners would be the end of paritarianism!”
Nicolas Ray, deputy Les Républicainsin the National Assembly
The RN deputy Mathilde Paris denounced a “scandalous attempted hold-up of Agirc-Arrco’s nest egg”. And the communist Pierre Dharréville criticized the government for its “unfortunate tendency to believe that what belongs to others belongs to him: he draws from the social coffers by letters of cachet”.
This coalition of oppositions is causing a wave of panic on the side of Prime Minister Elisabeth Borne. “In Matignon, they are paralyzed”an executive advisor told Politico, because “they are convinced that it will come across this provision”. For the moment, LR has not announced its intention to table a motion of censure in the event of a forceful passage by the government during the examination of budgetary texts, but the executive has learned, thanks to the pension reform, to be wary of the parliamentary right.