Dwindling reserves prompt Agirc-Arrco to review funding
FRANCE – Social partners managing the French second-pillar pension fund Agirc-Arrco will meet next month to negotiate new funding measures after recent projections found that the scheme’s rapidly dwindling reserves could dry up as soon as 2020.
In March 2011, the social partners signed an agreement to introduce a reform aiming to cut the pension fund’s deficit by more than 60% by 2030.
At the time, Agirc-Arrco – one of the 37 compulsory private pension schemes in France – had a deficit of just over €119.2bn. With the agreement signed, the scheme hoped to reduce that to around €46.2bn.
Cécile Vokleber, who is in charge of coordinating with other pension schemes, said at the time that the pension fund had managed to stay afloat due to its reserves, estimated at around €6bn for Agirc and €42bn for Arrco.
However, the schemes’ deficits of €1.7bn and €1.8bn, respectively, have widened over the past year, and, according to new projections from the pension fund itself, Agirc’s reserve could dry up completely by 2017, while those of Arrco would be close to zero by 2020.
Agirc-Arrco attributed this to France’s high unemployment rate, which some estimate could stand at 10% for years to come.
The pension fund’s social partners are to hold a meeting on 22 November to introduce further reforms to address the growing deficit.
While some social partners expect to introduce a new round of measures to stem the deficit temporarily, others have called for structural reforms.