New estimates for French second-pillar pension fund Agirc, issued early December, predict French executives’ pay-as-you-go (PAYG) reserves will dry up by 2017, despite last spring’s agreement on retirement reform.

Agirc will need to tap as much as €2.9bn in 2014 from reserves managed by decentralised social protection groups to pay ongoing pensions.

Contributions have been insufficient to match pensions since 2009.

In 2012, the pension deficit reached €2.6bn for Agirc-Arrco (€1bn at Agirc and €1.6bn at Arrco), while pension reserves fell to €48.8bn (€6.9bn for Agirc and €41.9bn for Arrco), compared with €67bn in 2005.

At the time, Agric-Arrco officials called for a mutual effort to stop the bleeding before reserves dried up.

Reserves were expected to fall to zero by 2017 at Agirc and by 2020 at Arrco.

But employers and employee representatives signed a national agreement on 13 March to reduce Agirc-Arrco’s pension deficit by lowering pension indexation and raising contributions.

This agreement was expected to postpone the depletion of the system’s reserves by 4-6 years – to 2020 for Agirc and 2025 for Arrco.

An additional reform of the French first pillar, announced last spring and to be voted on in the National Assembly on 18 December, was expected to bolster Agirc-Arrco’s finances, with an increased contribution period and older minimum retirement age to get a full social security pension.

The fact Agirc now expects its future to be just as gloomy as it was before the reforms has raised a number of questions in the French pensions industry.

Some have speculated the Agirc’s gloomy view serves corporate lobbies pushing for funded pensions in France, as the scheme is chaired by employers association Medef, which some say is the under influence of insurers and bankers.