Merger of the Agirc & Arrco systems: what it means for your retirement

On 1 January 2019, Agirc (Association générale des institutions de retraite complémentaire des cadres - General Association of Supplementary Pension Institutions for Managers) and Arrco (Association pour le régime de retraite complémentaire des salariés - Association for the Supplementary Pension Scheme for Employees) merged to create a single supplementary pension scheme.

The aim is to ensure the sustainability of the scheme and make it simpler. Access to your retirement fund is also easier:  retired executives now have a single point of contact, they hold a single pension points account and receive a single monthly payment. The contribution system is also simplified for companies.

From 1 January 2019:

If you are a non-cadre (non-executive) employee, your number of points will remain the same (1 Arrco point = 1 Agirc-Arrco point).

If you are cadre (executive): your Arrco points and your Agirc points are grouped together in a single point account. Your Arrco points become Agirc-Arrco points, while your Agirc points will be converted into Agirc-Arrco points at a certain rate. A conversion calculator is available on the Agirc-Arcco website to allow you to see any change in your pensions.

To restore the financial equilibrium of supplementary pension schemes, the social partners have established new retirement conditions. The aim is to encourage employees born since 1957 to work longer, with the introduction of a bonus-malus system.

If you qualify for your basic full rate pension, you are no longer automatically entitled to full payment of your supplementary retirement pensions.

If you meet the conditions to benefit from your basic pension at full rate on 1 January 2019, you are not affected by the penalty, regardless of your date of birth.

If you were born in 1957, and you apply for your supplementary pension after 1 January 2019 on the date you receive the full rate at the basic scheme, your supplementary pension will temporarily be reduced.

The malus:

• will consist of a 10% allowance on your Agirc-Arrco pensions;
• will apply for a maximum period of three years;
• will be effective until you reach the age of 67.

Future retirees who decide to postpone their retirement for more than one year will receive an increase in their pensions.

The bonus will reach:

• 10% if you postpone the payment of your supplementary pension by two years
• 20% if you postpone by three years
• 30% if you postpone by four years.

This increase is applied for one year.

There are situations where the reduction does not apply.  Pensioners exempt from the CSG payment are not affected by the penalty. And for those benefiting from a reduced CSG rate: the discount will be reduced to 5% instead of 10%.

The malus will not affect you if you:

• are disabled ;
• retire as part of the asbestos scheme ;
• are found unfit for work ;
• are a worker and have raised at least three children ;
• are a family caregiver ;
• raised a disabled child.

Finally, the penalty only applies if you meet the conditions for a full retirement rate. If you are engaged in a phased retirement or retiring when you are missing quarters, you will not be affected by this temporary reduction. The complete list of exclusion cases can be found at www.agirc-arrco.fr 

Changes will be visible on your payroll.

The new Agirc-Arrco plan is based on two salary bands:

• The first is between the first euro and the amount corresponding to a social security ceiling
  
• The second is between the amount of the social security ceiling and eight times the same amount.

The contribution rate and the distribution of shares between employers and employees are changing. In addition, a new contribution, the CET (Contribution d'équilibre technique), has been created for employees whose remuneration exceeds the social security ceiling. 

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