French private sector schemes cut deficit with €2bn investment gain
The deficit in France’s pension schemes for private sector employees and executives fell by around €700m to €2.24bn in 2016, helped in part by €2bn of return generated by the schemes’ reserves.
The aggregate deficit across the two schemes – Arrco, for private sector employees, and Agirc, for executives – stood at €3bn in 2015.
The schemes are part of France’s public pay-as-you go pensions system, covering round 22m active members and 15m pensioners. They are separate schemes for now, but are due to merge under reforms agreed in 2015 as part of an effort to tackle the funding shortfall.
The technical deficit, which does not include financial returns generated from the investment of scheme reserves, amounted to €4.3bn in 2016.
The scheme’s resources, mainly stemming from contributions from companies, amounted to €63.7bn in 2016. This was an increase of 3.1% from 2015, although this was partly the result of tweaks to previous payment calculations. The “real” increase was 2.3%, according to a statement from Agirc and Arrco.
Pension benefits, meanwhile, amounted to €73.4bn in 2016, up by 2.8% from 2015.
The technical deficit of €4.3bn takes into account a €5.4bn payment made to the schemes by AGFF, a vehicle set up by the Agirc and Arrco to finance the cost of early retirement.