Commission gives public aid to finance La Poste pensions for civil servants
Acting under the EC Treaty rules on state aid, the European Commission has authorized the aid planned by France for the reform of the arrangements for financing the retirement pensions of civil servants working for La Poste. The authorization is subject to conditions to ensure that La Poste and its competitors are placed on an equal footing as regards social security contributions and tax.
In the light of important commitments given by the French authorities, the Commission has concluded that the social security contributions and tax paid by La Poste would now be equivalent to what is borne by the postal operator’s competitors.
Under a 1990 law, La Poste was to finance in full the pensions paid by the State to its civil servants by way of a repayment to the State of the amounts paid out. This method of financing was a departure from the ordinary arrangement. Unlike an ordinary employer in a pay-as-you-go system, La Poste did not pay the levy that releases employers from any additional commitment for retirement pensions, but it had to ensure that the pension scheme for its civil servants was in balance.
By 1998, the balancing payment borne by La Poste had reached the ceiling of La Poste’s “employer’s” contribution for 1997. The proportion of the pensions paid by the State and not covered either by La Poste’s “employer’s” contribution or by the pension contributions paid by the civil servants still had to be borne by the State.
The 2006 reform, finalizing La Poste’s transition to the status of an ordinary competitor, provides for the operator to pay an “employer’s” contribution at a competitively rate, releasing it from all other payment obligations. The contribution is calculated in such a way as to make the level of social security contributions and tax payable on salaries paid by La Poste the same as that borne by other companies in the transport (mail/parcels) and banking sectors under the ordinary social security arrangements.
After a thorough investigation the Commission came to the conclusion that the 1998 ceiling and the 2006 reform constituted state aid. However, the measures do not go beyond what is strictly necessary to establish a level playing field in respect of social security contributions and tax. What is more, the measures bring to an end a distortion of competition that was unfair to La Poste. The Commission’s investigation accordingly concluded that the 1998 ceiling and the 2006 reform are compatible with the common market.
