France's supplementary pay-as-you-go pension schemes, Arrco and Agirc, merged on 1 Jan 2019 into a single scheme (Agirc-Arrco), under reforms enacted in 2015 to boost the scheme's reserves. Previously, Arrco covered blue-collar workers, and Agirc covered white-collar employees and management grades. The social partners have yet to agree on a new definition for "executives," as mandated by the reforms. Until an agreement is reached, employers should use current definitions for staff categories.
The reforms provide that:
─ Segment 1: €0 to €40,524
─ Segment 2: €40,524 to €324,192
The 2015 agreement mandated social partners to negotiate in 2018 a new definition for "executives," but so far, they have failed to agree. The definition is important for determining the applicability of certain company benefits (for example, health, providence guarantee and pension schemes) to staff categories (“cadres,” “noncadres” and "all staff”) and company tax breaks.
The social security administration has advised employers to use current staff categories until a new definition is finalized. Contributions should be calculated using multiples of the social security ceiling, rather than based only on Segments 1 and 2.