France has ended an agreement with Switzerland on social security contributions for very well-paid executives, an agreement deemed too costly by Paris. This arrangement, which allowed certain senior managers of large French groups to affiliate with LAMal to avoid paying these contributions in France, will end on January 1, 2025.
According to France Info, around twenty large French groups such as Total, Renault-Nissan and Michelin would benefit from an administrative arrangement to affiliate their senior executives to the LAMal, thus escaping the very costly French social security contributions, an officially authorized derogation measure. for a limited period of six years.
Concretely, this allows these companies to send their senior managers to Swiss subsidiaries, while having them work in France. Few employees would be affected: around 4,500 between 2016 and 2022, but these are employees earning more than 500,000 euros annually.
Legal but today controversial, this practice is permitted by an agreement dating from 2009. According to a confidential report, it would cause France to lose 300 million euros per year.
Bern confirms
In Bern, the Federal Social Insurance Office (OFAS) confirmed to RTS the existence of this agreement. “This is a specific administrative arrangement concluded at the request of France in 2009,” said a spokesperson, “with the aim of promoting cross-border mobility of workers between group companies of international dimension.”
The federal administration also confirms that France has indeed recently denounced this arrangement, with effect from January 1, 2025. However, it has not confirmed the shortfall for France articulated by France Info, indicating that it does not have data on the financial impact of this agreement on the social insurance systems of the two countries.
In 2009, the French government behind this now-maligned arrangement was led by François Fillon and France chaired by Nicolas Sarkozy, both from the same political family as current Prime Minister Michel Barnier, Les Républicains (RIGHT).
A symbolic measure
After the episode of unemployment compensation for cross-border workers a few weeks ago, this is a new episode which involves Switzerland in the French government’s search for savings, potentially giving the impression that Paris is accusing Berne. to “dig the social security hole”.
>> Read about it: French cross-border workers could receive less unemployment benefit
But in view of the 40 billion euros that the French State wants to save in 2025, this potential saving of 300 million per year sounds above all like a symbolic measure, a measure of fairness, just like the one which resulted in a reduction significant unemployment benefits for cross-border workers.
>> Read also: Less public spending, more revenue: the French government presents its 2025 budget
Radio subject: Benjamin Luis
Adaptation web: Vincent Cherpillod
