The deficit in France’s mandatory private sector pension schemes amounted to €1.2bn in 2017, nearly €1bn less than the year before.

In 2016 the overall deficit was €2.2bn.

Agirc and Arrco said the technical deficit for 2017 was €3.5bn, down from €4.2bn the year before.

Returns of nearly €1.5bn generated by invested reserves were offset against the technical deficit. An exceptional gain of almost €900m was also booked in 2017, mainly as a result of the schemes taking over legal ownership of real estate assets from La Foncière Logement, a public housing association. The agreement was signed in April 2017, with a €6.2bn portfolio of 30,000 housing units the first assets to be transferred. 

The schemes took in €65bn of contributions last year and paid out €73.8bn in benefits, a slight increase of 0.5% on 2016. The schemes are unfunded.

The results put Agirc and Arrco slightly ahead of the trajectory agreed by the social partners, the schemes said in a statement. 

Agirc and Arrco are the compulsory pension schemes for the French private sector, with Agirc covering managerial staff and executives and Arrco covering employees. As of the end of last year 1.6m employers and 18m employees were paying contributions to the schemes.

According to a report released in January, in 2014 Arrco counted 40.5m members, meaning that almost 96% of individuals born in France and between the ages of 24 and 59 had at one point contributed to the scheme.

The two schemes are separate for now, but are due to merge under reforms agreed in 2015 as part of an effort to tackle the funding shortfall.