Cash & Liquidity Management

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AGRIC and ARRCO Sophie Rack interviews Philippe Goubeault, Finance Director of AGRIC and ARRCO – Secretary of AGFF

Philippe Goubeault

Finance Director of AGRIC and ARRCO – Secretary of AGFF

“The Agirc and Arrco systems cover 18 million members, including around 3.7 million managers”

La Lettre du Trésorier

Your thesis at the end of your studies prepared you for your current role, I believe?

Philippe Goubeault

Yes that’s right, when I was doing my doctorate in economics and finance at Orléans I wrote my thesis on financial mechanisms for retirement. This is why, in 1981, I was called upon by Arrco where a post had just been created within the technical and finance division. Afterwards as an actuary I was appointed head of technical services in charge mainly of research into the prospects of changes in regimes, research made available to the social partners for their negotiations and then the technical and financial director of Arrco. After the merger of Agirc and Arrco, when the economic interest group Agric-Arrco was formed in 2002, I became finance director of both associations. The Agirc and Arrco systems cover 18 million members, including around 3.7 million managers.

LdT
The organisational structure of Agirc-Arrco is not exactly simple, is it?

PG: The Agirc-Arrco economic interest group combines the resources of the two associations in respect of the two supplementary pension schemes. Arrco is for employees in the private sector and Agirc for managers. The management of each scheme is decentralised. Within each of the associations, the member institutions cover contributions, pay out benefits and manage the shares of the reserves.

All the entities within the system, the two federations and their institutions, the AGFF and the social protection groups are managed by the social partners.

As regards the administrative management of the institutions, the methods put in place are those used by the social protection groups which combine in each case for the compulsory retirement activities, an Arrco institution and an Agirc institution, and for activities in the competitive area, contingency funds, insurance or savings institutions. These groups, the biggest of which include Reunica, AG2R, Médéric, Malakoff, ProBTP, are around twenty in number.

The system for complementary pensions schemes is completed by the AGFF, a fund that finances Agirc and Arrco, paying the additional costs of early retirement (retirement at 60 and before 60 for long careers) and distributes its surpluses amongst the two schemes. The AGFF is supplied by a separate contribution covered by the institutions, which accounts for annual flows of around €9.5 billion.

All the entities within the system, the two federations and their institutions, the AGFF and the social protection groups are managed by the social partners.

How does the finance division of Agirc and Arrco contribute?

PG: Apart from the accounting activities, notably drawing up the schemes’ accounts, the most important duties of the finance division are to carry out the financial settlements amongst the institutions. As the employees we cover do not all have the same demography, some institutions are in surplus and some in deficit. The settlement process therefore consists of organising, applying a principle of general joint liability, movements of funds between the institutions so that everyone has the necessary cash to pay the benefit instalments.

The second duty that we have is to provide the best conditions and an overall coherence for the decentralised financial management. The finance division offers the bodies schemes and periodically updates a regulatory framework and the strategic policies incumbent on all the institutions, and monitors whether this has been correctly applied. The latest version of this financial ruling, which dates from 2007, has opened up possibilities to invest in alternative management of funds of funds, some structured products and in international diversification.

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