FRANCE- French employers and unions are meeting to discuss supplementary pensions in preparation for forthcoming discussions with the government regarding the future of the pensions in France.
At the meeting, the two parties will discuss extending the AGFF’s agreement of February 2001 in order to prevent some pensioners having their retirement income cut by almost a quarter.
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 AGFF fully entitles pensioners under 65 to their supplementary company pensions. Ordinarily employees are not paid their supplementary pension in full until the age of 65. But the agreement runs only to the end of 2002, and unions say if the AGFF does not extend the agreement, those below 65 years choosing later than December will see their Agirc and Arrco pensions slashed by as much as 22%.
Just how long the agreement should be extended is also open to debate. Medef, the French federation of employers, is pushing for an extension of only six months, a period the unions believe to be too short. The AGFF has financial reserves which would in theory be able to pay pensioners of only 60 years of age until the year 2010.
The outcome of the discussions will be put forward in the forthcoming meeting with the government regarding the future of pensions in France. The French government has already announced its intention to begin meetings this autumn to discuss basic pensions reforms which should be introduced by the end of June 2003. Unions insist that the government should also be considering reforms to supplementary pension schemes.