good news pensions are finally on the rise

Good news regarding the Agirc-Arrco retirement. In fact, the latter will increase for millions of retirees at the end of the year.

The Agirc-Arrco retirement system in France is a regime supplementary pension mandatory which concerns all employees in the private sector. Moreover, the latter will increase for millions of French people.

The Agirc-Arrco retirement, the merger of two systems

Previously, the Agirc and Arrco pension were two separate plans. Agirc was intended for executives and Arrco for non-executives, but faced with the need for simplification and more efficient management, these two regimes were merged in 2019.

To create one and the same regime: Agirc-Arrco. This unique regime now applies to all employees from the private sectorwhether they are executives or not.

The Agirc-Arrco system therefore works on a point-based retirement mode. Each year, contributions paid by employees and their employers are converted into points. According to a conversion rate which varies depending on the evolution of wages.

But also the financial situation of pension funds. The amount of the retirement pension is then calculated based on the total number of points accumulated during the employee's career, multiplied by the value of the point, which is revised every year.

Contributions are therefore shared between the employer and the employee. In 2024, they represent approximately 7.87% for the employee share and 8.64% for the employer share, on a gross salary.

The contributions are distributed in this way in two tranches. Tranche 1, up to the Social Security ceiling (€3,666 per month in 2024).

A reformed pension

Tranche 2, beyond the ceiling, up to a certain amount. The contribution is calculated based on gross salary and distributed between Agirc and Arrco.

The amount of the Agirc-Arrco pension depends on several factors, including the number points accumulated. Each year, the employee accumulates points according to the amount of his contributions.

In 2024, the value of the point is approximately €1.3498. Plus one no one works a long time and contributes, the more points she accumulates, and therefore the higher her pension becomes.

The total amount of the pension is obtained by multiplying the number of points accumulated by the point value. It is therefore important to note that the Agirc-Arrco pension is paid in addition to the basic Social Security pension.

The Agirc-Arrco system has therefore been the subject of a reform repeatedly to guarantee its sustainability. Faced with the aging of the population and the increase in life expectancy, adjustments are necessary to avoid financial imbalance.

For example, the system has therefore introduced an equilibrium age for retiring at full rate and regular adjustments of the point value. The Agirc-Arrco plan also provides for a survivor’s pension. This allows the surviving spouse to receive part of the deceased insured's retirement pension.

Good news for Agirc-Arrco retirement

A revaluation of the Agirc-Arrco pension is underway. It therefore aims to improve the daily retirees by offering them a little more flexibility in their budget.

For example, a retiree receiving a pension of 800 euros per month will see his allowance increase almost 13 euros. This revaluation represents an annual cost of 1.6 billion euros for the regime.

This increase mainly concerns retirees with a full career in the private sector. Such as artisans, traders and farmers.

To benefit from it, you must have contributed to the minus 120 quarters. The eligibility conditions are therefore said to be particularly favorable to low-income retirees.

In the future, Agirc-Arrco pensions will be reassessed every year on November 1st. An essential measure to help retirees preserve their purchasing power in the face of inflation and to economic fluctuations.

This announcement is therefore part of a broader debate on the future of systems of retirement in France. While discussions on comprehensive pension reform continue, this increase demonstrates the desire to protect the purchasing power of retirees.