While the cabinet of the Secretary of State in charge of pensions, Laurent Pietraszewski confirmed to Le Monde on Tuesday, November 16 that basic pensions will be increased by 1.1% on January 1, 2022. For the retirees of Agirc-Arrco, the supplementary private pension, pensions were only revalued by 1% on the 1ster November. They had not evolved on 1er November 2020 due to the impacts of the health crisis on the regime’s accounts. A former employee receiving, for example, a total gross pension of 2,000 euros, including 600 euros of complementary, thus sees his pension increase by 6 euros and pass to 2,006 euros gross.
Why 1%? You should first know that at Agirc-Arrco, it is not the government that is in the driver’s seat, decisions are taken jointly between the unions and employers who co-manage the regime and that the latter negotiate between them, on a regular basis, the management rules, including annual revaluations.
The last agreement they signed was in May 2019. The social partners had agreed to increase the plan’s pensions by at least as much as inflation each year until 2022, to compensate for the rise in prices. In detail, it was planned to be based on the latest forecast for the evolution of the consumer price index, excluding tobacco, for the current year, communicated by INSEE, as an annual average.
Compensate for inflation … with some exceptions
But this rule did not apply in November 2020. An exception provided for by the 2019 agreement stipulated that in the event of inflation higher than the evolution of wages, pensions would evolve like the average salary of nationals of the scheme, without however being able to decrease. The hypothesis was unlikely when the social partners drafted the agreement but, Covid obliges, it came true in 2020. “The evolution of wages [a été ] negative due to the exceptional economic context linked to the health crisis ”, explained Agirc-Arrco.
And for this month of November 2021, another exception provided for in the 2019 agreement applied. It was expected that if the financial situation of the scheme deteriorated and the reserves were no longer equivalent to at least six months of pensions until 2033, the rule of revaluation according to inflation would not be applied automatically, and the council of Agirc-Arrco should alert the social partners.
This is what happened. “As for all pension plans, the accounts of Agirc-Arrco suffered the effects of the health crisis and its economic consequences”, the regime said in October, highlighting a overall deficit of 4.1 billion euros in 2020. According to its financial projections, reserves would drop below six months of benefits in 2029.
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