On 1 January 2019, the two private-sector, second-pillar, mandatory pension schemes Arrco (for non-managers) and Agirc (for managers) merged into a single scheme known as “ARRCO-AGIRC”. The impact of this merger goes far beyond the mere question of complementary (second-pillar) pension rights and contributions. It may well affect the whole range of complementary social protection schemes. This is because most company schemes today make a distinction between management and non-management employment status. These statuses are the ones most generally accepted objectively by the social-insurance collection agency URSSAF (provided they are used correctly). Merging these two pension funds appeared to have opened the door to simply doing away with these two statuses resulting in total upheaval within the whole range of social protection and retirement savings schemes. However, a letter published recently by the Social Security Directorate (the DSS) has calmed the troubled waters. Here are some answers to outstanding issues.
What will happen to schemes currently in force?
The legal texts (articles 4, 4b and 36 of the 1947 Collective Bargaining Agreement – CBA – on social protection and occupational pensions for management staff known as CCN Agirc) have disappeared… Does this mean that schemes in force on 1 January 2019 that make reference to these categories became null and void at the dawn of the new year? You might well think so. This is not the case, however. A letter from the DSS dated 13 December 2018 clarifies things by saying that current agreements would continue to function, without any risk of sanctions, for as long as it takes to lay down new rules. The letter goes even further by saying that the article of the Social Security Code (CSS) (article R. 242-1-1) that refers to management and non-management categories will need to be re-written after negotiations that will need to take place between both sides of industry (the “social partners”) on manager status. The upshot is that there is no need to worry over the short term. In fact one can reasonably imagine that the distinction between management and non-management staff may not completely disappear.
How will future schemes be structured?
Before the DSS letter, it was clear that the Social Security annual salary ceilings (or “tranches”, known as PASS) had become the most “objective” criteria in the eyes of URSSAF. As an indication, the monthly SS ceiling (PMSS) for 2019 has been set at €3,377. Scheme ceilings may be expressed in terms of 1, 2, 3 or 4 times the PMSS. For instance, schemes may differentiate between staff belonging to the category “remuneration below 2 x PMSS” or the other category. The DSS letter changes the ball game. Nothing stops you referring to management and non-management categories when putting in place new schemes since these objective categories continue to apply until new rules are put in place.
What about “article 36” staff?
Nothing will change, at least for the time being, for so-called “article 36” staff i.e. those whose specific job position mean they join Agirc but without management status. Their situation will also have to be clarified in the course of negotiations between the social partners. For the moment, the best way of safeguarding a scheme is to consult the affilia website (http://affilia.agirc-arrco.fr) so as to find the exact objective category (according to CSS article R. 242-1) corresponding to a salaried person’s category in the applicable CBA. For instance, in the metal working industry, an employee whose CBA job category is level III, grade 2 automatically joins the second-pillar management scheme by application of article 36. Consequently, URSSAF requires the same proofs as before.