---

In line with the commitment made by the Prime Minister in 2023, an inter-inspection mission—composed of the General Inspectorates of Administration, Social Affairs, and Finance—was appointed to review the financial situation of the CNRACL (Caisse nationale de retraites des agents des collectivités locales), the pension fund serving local government and public hospital employees. This statutory pension scheme covers 3.7 million people (contributors and retirees).

By the end of 2023, the fund’s financial indicators had significantly deteriorated. The operating result showed a deficit of €2.5 billion, net equity was deeply negative (–€4.9 billion), and daily cash flow needs exceeded €10 billion on certain days. Looking ahead to 2030, the annual deficit is projected to surpass €10 billion under current rules.

Several factors explain this situation

Structural factors inherent to the scheme :

• A worsening demographic ratio: from 4.53 contributors per retiree in the early 1980s, it steadily declined to 1.46 in 2022.

• Specific scheme characteristics: CNRACL affiliates have a longer-than-average life expectancy in retirement and a high rate of early retirements.

External factors :

• A shrinking contributor base due to the rise in contract employment, where workers contribute to the general pension system for their basic coverage and to IRCANTEC for their supplementary benefits.

• Current demographic compensation methods exclude retirees under age 65 from calculations and disregard contribution history.

A lack of funding diversification :

• Statutory pension benefits are funded almost exclusively (97%) through contributions.

Recovery strategies

Beyond strengthening the governance of the scheme, the task force proposes a framework to align CNRACL funding with that of other pension systems :

• Segmentation of contributions by risk category (basic pension, supplementary pension, disability) to promote transparency and enable targeted policy measures;

• Alignment of external funding sources with those of other schemes (particularly compensating for non-contributory benefits tied to family policies);

• Offsetting lost contributions from contract workers by introducing a levy on the wages of such employees for the benefit of CNRACL;

• Review of the demographic compensation mechanism, under the guidance of the Pensions Advisory Council (COR).

Lastly, to maximize the impact of these measures, the mission emphasizes the importance of starting from a financially sound position. Based on current forecasts and in the absence of corrective action, the employer contribution rate—currently 31.65%—would need to rise to 50.34% by 2030 to balance the scheme. The combined effect of the above measures (excluding debt clearance by the end of 2024) would reduce that rate to 45.13%. If the scheme’s deficit were cleared by the end of 2024, the rate could be halved, and potentially lowered further depending on payroll trends.

Access to the entire report in French

• Situation financière de la Caisse nationale de retraite des agents des collectivités locales : Bilan et perspectives