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The truth about reform retirements!

Between December 2019 and February 2020, more than 60 days, France was paralyzed by the longest strike since the liberation, exceeding those of 1968, 1995 and 2010. The reason for this strike, which never ended, was certainly due to the pension reform wanted by Emmanuel Macron but, certainly, also because of the appalling social climate which reigned in France since the Yellow Vests crisis started in November 2018 and which went by day after day, especially over the weekend.

Politicians or trade unionists, experts, sociologists and economists exposed for long weeks this reform which seemed so complex and which was presented in such a confused way.

The COVID crisis has allowed politicians to put this reform on hold and thus not lose face by completely remodeling it. It was all the easier since a change of Prime Minister, a new Presidential election, and a brand new Prime Minister from the left has reset the counters.

But presidential promise requires, especially since it is the only one that could be partially kept. And so, at the beginning of 2020, with a very weakened relative majority, the executive is putting the said reform back on the job after having purged the essential element of it, the one which was to radically transform the model: move to a retirement on points for the CNAV!

Consequently, in order to help you better understand this reform, we thought it was urgent to present a simple and comprehensive summary in order to decipher all the aspects of this reform and put it into perspective with all the social achievements. who have made our country proud since liberation.


Emmanuel Macron pledged during the 2017 presidential campaign to converge the quarantine of pension schemes into a system "universal". A points system where “1 euro contributed gives the same rights, regardless of when it was paid, regardless of the status of the person who contributed”. And this without affecting the retirement age or the level of pensions.

In fact, Emmanuel Macron is only continuing a phenomenon that began in 1988 with the merger of the Caisses de Retraite des Cadres Supérieurs within Agirc and continued continuously since 1996 with a view to merging Arrco and Agirc. .

This objective was achieved on January 1, 2019, the date on which Arcco and Agirc merged into a regime called Arcco-Agirc.

This point-based pension scheme now brings together the supplementary pensions of non-executives, executives and senior executives from the general scheme.

The final objective is to create a single fund which would bring together the Arcco-Agirc, the CNAV and the so-called “special” schemes in a universal points scheme!

Beyond the communication arguments, what is the real reason for this Unique and Universal Points Scheme?

It is not difficult to understand that the main interest of such a scheme is that the financial balance is achieved in a very simple way using only two adjustment parameters: the value of the point and the age retirement age renamed “pivotal age” by Edouard Philippe!

Hence the fears of the unions!


Thus, the government's intention was to merge the CNAV and the Arcco-Agirc scheme in order to have only one pension fund for the General Scheme, to abolish the Special Schemes and the Category Pension Funds in order to obtain a Universal Points Retirement Fund

This essential part of the MACRON reform has now been abandoned!

To fully understand the interest of this reform, a new version, which abandons the point reform for the CNAV part, it is important to understand how it is calculated.

Currently, the basic Social Security pension (CNAV) is calculated in a complex manner on the basis of the best 25 years of salary updated on the day of retirement and, for each of them, limited to the social security ceiling, i.e. 40.524 euros.

The amount of the pension is equal to 50% of this average year. It cannot therefore be greater than 40.524/2 = €20.262 or €1.688 per month

But since the discount coefficients are not perfect, the actual maximum pension is around €1.400 gross! On the condition of having his 43 annuities!


In view of these elements, it is clear that the switch to a points system would have meant taking into account the entire career and not the best 25 years. And, what ofn this context, it is obvious that pensions would be greatly reduced, especially for those who started with very low wages.

Let's not forget that for all retirees with a supplementary pension, and in particular executives and equivalent executives, the CNAV retirement represents the minimum portion of their retirement. Only the lowest salaries have a pension entirely or mainly made up of the CNAV pension and are therefore the main losers of this reform. Which makes it a very unfair reform towards the lowest incomes.

The points pension does not change much for those for whom the supplementary pension constitutes the main part of their pension (salaries higher than €3.377 per month) but on one condition: if and only if they are guaranteed that the point cannot drop!

There is at least one advantage to point retirement: the point is counted at its real value since the calculation takes into account the current value of the point!


Historical review :

For 70 years, the supplementary pension managed by the social partners has proven its effectiveness. Their prudent management has made it possible to constitute 64 billion in reserves during the years of economic growth. The reserves make it possible to compensate for the years for which the growth of the contributions collected is weaker than that of the pensions paid. Thanks to her the level of pensions is maintained. The supplementary pension has no euro debt.  

It was in 1988 that the Complementary Pension for Senior Executives (IRICASE, etc.) merged with Agirc and the points from these pension funds were converted into Agirc points.

Since then, the merger of Agirc and Arrco has been part of a continuous movement of rapprochement between the two regimes since 1996, the year of the first agreement establishing common provisions for Agirc and Arrco.

On January 1, 2019, the merger of these two pension funds was finalized and the Arcco and Agirc plans disappeared in favor of the new Arcco-Agirc plan!


It is clear from what we have seen previously that the big losers of this reform, as initially designed, would have been employees who do not exceed the social security ceiling, i.e. €3.377 per month in January 2020!

If the reform were applied without corrective measures, these would lose significant purchasing power.

The other big losers in the current state of affairs would be those who are governed by the special schemes because, for many of them, not only is the retirement age much lower than that of the general scheme, but in addition the amount of their pension is based on their last six salaries and not the best 25 years.

And if, indeed, these regimes are privileged, they are often the consequence of difficult jobs: policemen, soldiers, nurses, construction workers,... And, if it is obvious that certain jobs can no longer be exercised from a certain age, we do not understand why these employees could not then be reassigned to departments where their work would be more in line with their current physical abilities, and that instead of retiring them.

The typical example is that of an active General who retires at the age of 55. It is very common for him to take a post as an administrator in a large company where he can showcase his professional qualities. Therefore, why could the professional qualities of this general not be placed in the service of the army but in functions compatible with his age (training, management, etc.) rather than putting him at the service of the army? retreat ?

Finally, who are the big winners? Undoubtedly all those whose salaries are in the €120.000 to €324.000 bracket because they should be, in view of the new reform, exempt from pension contributions on the tranche exceeding €120.000, which corresponds to a net salary increase of several tens of thousands of euros!

At a time when the State is seeking to make up for the deficits, this gift made to salaries exceeding €120.000 will leave you speechless while it will generate a shortfall of 3 to 5 billion euros for the pension funds!


To reject this reform, several objections were put forward by the unions, including the so-called reformist unions:

  1. Pivotal age or legal age, the unions are firmly opposed to raising the age at which one can claim a full pension
  2. Labor unions strongly oppose cut in pensions
  3. Medef opposes any increase in employer contributions
  4. Employee unions oppose the end of special schemes without substantial compensation

All the commentators affirm on the media that financial balance requires playing on one of the following three parameters: raising the age of retirement at full rate, increasing contributions or reducing pensions. However, they omit a substantial element: the contribution base.


Retirement is a matter of intergenerational solidarity, so why should it depend solely on payroll deductions?

If we consider that retirement is an action of solidarity of the younger generations towards their elders then it is not the only employees who must contribute to it but all the active people whatever their income.

Several possibilities are then open to the legislator!

  1. Make up for deficits through a variable CSG depending on the economic situation
  2. Tax all pension contributions through the CSG as we have already done for the old-age contribution and the CRDS
  3. Purely taxing pensions

The advantage of partial or total taxation is not to burden the cost of labor while maintaining the social benefits of employees.

So how can the financing of pensions be guaranteed without penalizing social actors or increasing labor costs? By taxing all or part of the contributions and therefore making the income from savings, dividends and heritage contribute


In view of this new vision of social contributions, we have seen that there are three possibilities for a reform that changes the model of contributions.

  1. Keep the current system and ensure the financing of any deficit by a variable contributory CSG knowing that one point of CSG generates 18 billion euros, i.e. more than the upper range established by the COR for 2025. Thus it would suffice to adjust the rate between 0,2 and 1% to fully guarantee the financing of pensions while preserving the current system
  2. the second more radical possibility is to finance pension contributions no longer by a levy on wages but by the CSG and therefore to completely change the base of the levies. You should know that the base of the CSG is three times higher than that of the payroll. Today the contributions (employee and employer) represent 30% of the gross salary (60% employer's share and 40% employee's share). If we go to the CSG, and given the 3 to 1 ration of the base, it would suffice for a contribution of 10% of the CSG to deduct the same amount as today on the payroll. Therefore, 10% of CSG divided into 60% employer and 40% employee, would reduce the employee contribution from 12 to 4% and the employer share from 18 to 6%! If we add 1% to compensate for a possible deficit, we would go from 12 to 5% for employees and from 18 to 7% for the employer's contribution. Thus the purchasing power of employees would be increased by 7% and the cost of labor would fall by 11% (or the company's profits would increase by 11%). So this model would be a winner for everyone, including for the national growth rate; only those whose income is that of heritage would be put to an effort of solidarity, all the more justified as they no longer pay the ISF!
  3. Finally, the most drastic reform would be total taxation of pension contributions: deduction from the income and profits of self-employed persons and payment of retirement in the form of a pension. But this would require a total overhaul of the system with a retirement income calculated on all income declared throughout life.

This is a reform that would be fair and preserve social peace!


The objective is to guarantee the financing of pensions, to preserve social achievements and to maintain social peace while developing the feeling and the bond of intergenerational solidarity!

The financing guarantee can be provided by one of the three solutions developed above.

The other point to be mentioned is the abolition of special regimes while guaranteeing the fairness of the system.

There can be no equal treatment because some jobs are so strenuous that they are impossible at an advanced age. It is clear that a policeman, a gendarme, a soldier, a construction worker... cannot work as long as a lawyer, a doctor, an administrative worker,... It is therefore necessary either to ensure them, from a certain age , a guarantee of work within their company in a service compatible with their age, or to allow them to benefit from additional contributory quarters depending on the arduousness. All this can be established in branch-specific collective agreements.

Finally, everyone must be guaranteed a minimum pension that allows a decent life: this could be an amount equivalent to the minimum wage!

Guaranteed income, fairness in the face of hardship, guaranteed funding and social peace, that's what we need! We must take the time necessary to put all this together, present a coherent project with different alternatives and submit it to the verdict of the people by referendum!

Because in a democracy the people are always right, no offense to those who think they are much smarter than them!

Richard C. ABITBOL

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