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French employers & unions reach pensions agreement

FRANCE- French employer groups, headed by Medef, have reached an agreement with unions that ensures those retiring at 60 will entitled to their full supplementary pensions so long as they do so before 1st October 2003.

At the meeting on Tuesday the parties agreed to extend AGFF’s February 2001 agreement to 30 June 2003.

AGFF was set up by France’s two supplementary pension schemes l’AGIRC and l’ARRCO as its fund management company to finance the cost of early retirement for their employees after pension pay-outs by the two funds were frozen until December 2002 due to deficits.

The agreement, which stated that the AGFF would finance the supplementary pensions of those retiring between 60 and 65, was originally to run only to the end of 2002.

Unions were displeased with the outcome of the meeting, however, believing Medef’s agreement to be a political play ahead of scheduled meetings with the government me.

Medef has been pushing for a gradual increase in the retirement age from 60 to 65 to combat projected budget deficits in the pensions regime due to increasing life expectancy rates.

Furthermore, unions believe a six-month extension of the AGFF agreement is too brief and could affect their battle against Medef’s proposal to increase the retirement age.

Both sides are pushing for supplementary pension schemes to be recognised within the government’s 2003 basic pension reforms.

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