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AGIRC and ARRCO no closer to cutting costs

FRANCE- France’s two second pillar schemes, AGIRC, the general association of pensions institutions for managerial staff, and ARRCO, the association for the supplementary retirement scheme for salaried employees, seem no closer to answering the social partners’ demands of reduced management fees.

In February 2001, AGIRC and ARRCO agreed to come together to tackle the issue of costs by December 2002. Currently all employees in the private sector are contributing to and receiving pensions from ARCCO (around 15m contributors), while professional and managerial staff are also having to contribute to and receive a pension from AGIRC (around 2.3m contributors). In addition to being cost inefficient – the doubling up of administration for each employer and employee – the overlap is considered confusing.

Yet although the two schemes have now moved into the same office in Paris and become GIE AGIRC ARRCO, they are still operating as separate entities, and plans to offer one pension/one contribution between have not been drawn up.

“At the moment we are studying whether employees and employers are interested in receiving and contributing to only one pension. We are looking at different methods of implementing this and will decide on the best way of doing it,” says Cécile Vokleber, adviser at GIE AGIRC ARRCO.

“Whether it will be implemented in one year’s time, or two or three, cannot be said. But we have to propose some sort of plan by December.“

It is unlikely, however, that such plans will arrive by December. A spokesman of Medef, one of the social partners now expects renegotiations to happen before June 2003, and admits “we don't know how it will conclude.”











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