Social dialogue seems still stuck on the AGIRC ARRCO file while the crates are emptied tirelessly.
financial forecasts continue to deteriorate for supplementary pensions organizations executives (AGIRC) and non-managerial employees (ARRCO). Even assuming their merger, the two complementary could “fail” from 2023.
There is already one year, Agirc (supplementary pension fund managers) estimated that its coffers would be empty by 2018 due to the deepening its annual losses. This estimate is confirmed today according to information of the Echoes, while forecasts degrade to the proposed merger between the AGIRC and ARRCO (supplementary pension fund for non-managerial employees).
In fact, while in June last two bodies had considered that their “merged” boxes would be empty by 2025, the estimate had been advanced to 2023 according to.
These estimates thus similar to those of the Court of Auditors made public last February. The institution already estimated that the merger of the two cases would lead to empty drawers from 2023, and warned about a possible drying up of reserves from 2016 to Agirc. Recall that the liquidity crisis would be fatal for both organizations whose statutes prohibit debt.
Blocking dialogue on the proposed merger Agirc-Arrco
Given the urgency of the situation, any rapid and effective solution should be good to take. Thus, despite the deterioration of the forecasts, the proposed merger of the two funds is still a major planned for Agirc Arrco can benefit from the funds not to be “dry” by only three years . Problem: this solution, which would also extend the deadline as a “failed system” is still rejected by the main social partners
“The CFE CGC, the union executives,. is determined to not let go of his regime supplementary pensions Agirc. Ten days of the resumption of negotiations on supplementary pensions of employees, 27 May, CFE CGC launches a preventive campaign on Tuesday against a merger of funds AGIRC and ARRCO regard it, all employees including executives. For the union, this would mean the end of the status of executives, “explained Le Figaro during the day.
” To save Agirc, the GSC proposes instead to increase contributions by 1.25 point in this plan, which would generate additional rights only up to 1 point. The measure would cost on average € 6.65 per month to a frame, plus 10,85 euros to his employer and bring in one billion euros per year, “explained in detail Les Echos.
A figure compared to the deficit of Agirc, exceeding 3 billion euros per year since 2012. In short, even the solution proposed by the GSC would offset a small third of the problem.
Root causes: aging population and low rates
At issue in this collapse reserve additional funds: the aging of the population, of course, but also lower rates interests in the eurozone.
Regarding the aging population, it is recalled that Agirc now has 2.7 million retired beneficiaries for 4 million contributors. However, pensions paid to retirees greatly exceed the amounts paid by contributors. Same side Arrco, which has 11.9 million former employees now retired while counting 18.1 million contributors with an imbalance comparable to that of Agirc.
rates practiced in the eurozone (especially those of sovereign bonds) are in turn fell to historically low levels this year despite their recent rebound might only be ephemeral. However, the AGIRC and ARRCO funds mainly manage their funds by investing in fixed income markets. The recipes for these funds gradually fall because the old bonds “well paid” expire, and are replaced by newer bonds pay rates close to 0%.
The combination of the two factors creates an explosive cocktail which the PAYG system is unfortunately not suitable.
X. Bargue
Read over our previous articles on the financial difficulties of the AGIRC and ARRCO:
– Financial Chasm for cash retired cadres
– Cases of supplementary pensions: the more alarming than expected
– 55% of French believe that the complementary pension will go bankrupt within 5 years
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