The recent negotiations regarding supplemental pensions between social partners at Agirc-Arrco have ended without consensus. The meeting on Friday morning and the follow-up in the afternoon failed to produce an agreement, marking an unusual stalemate in what is typically a straightforward process.
Stalemate in Agirc-Arrco Pension Negotiations
Pascale Coton, Vice-President of the French Confederation of Christian Workers (CFTC) and responsible for pension matters, noted the seriousness of the situation. Unlike previous negotiations that reached agreements swiftly, this time, all parties stood firm on their demands without yielding.
The outcome of these challenging discussions means that 14 million private sector retirees will see no increase in their supplemental pensions starting November 3. These pensions contribute significantly to overall retirement income, averaging between 30% and 60% of retired individuals’ total pension benefits.
Financial Standing of Agirc-Arrco
Despite the lack of a pension increase, Agirc-Arrco’s financial accounts are reportedly stable. An increase had been anticipated following a 1.6% adjustment last year. However, a rise would likely have been smaller this year due to a 1% inflation rate reported by INSEE in September. Traditionally, this calculation would permit a minimum of 0.2% and a maximum of 1% for the supplemental pension adjustments in line with Agirc-Arrco agreements.
- Expected revaluation range: 0.2% to 1%
- Last year’s pension increase: 1.6%
- Current inflation rate: 1% (as of September)
During the initial discussions at 10 AM, unions called for a 1% increase, arguing that the freeze on pensions, as indicated in the Social Security Finance Bill (PLFSS), warranted a complementary boost.
Concerns for Future Funding
Michel Beaugas, the Secretary for FO overseeing pensions, emphasized the importance of maintaining reserves to cover at least six months’ worth of pension payments under Agirc-Arrco’s financial principles. He indicated that a 1% increase would still leave the fund with nine months of reserves.
Conversely, employers remained adamant, offering no more than a minimum 0.2% increase. Michel Picon, President of U2P representing small businesses, supported this decision, highlighting the potential for a rapid decline in reserves due to the suspension of the Borne reform. The concern is that fewer contributions will flow into the system with the current legal retirement age frozen at 62 years and 9 months, potentially costing the fund nearly two billion euros.
Failed Negotiations and Future Implications
After multiple rounds and two votes during the council meeting, the negotiations concluded without agreement. Social partners reconvened later, but even a revised union proposal of a 0.8% increase failed to gain acceptance.
Coton expressed exasperation with the ongoing standoff, noting that even U2P was resistant to compromise. This frustration reflects a broader discontent within the business community aimed at the government for suspending the reform, which has overshadowed the Agirc-Arrco negotiations.
Picon reiterated the necessity of maintaining their position on the minimum increase to prompt government responsibility, underscoring the challenges ahead for social partners in addressing retirees’ needs amidst continued financial uncertainties.
