Changes in the Pension Schemes in the Banking Sector - Financial Consequences

Financial Consequences of the Agreement of September 13, 1993

On September 13, 1993, employees and management in the banking sector signed an agreement amending the Collective Bargaining Agreement which, up to that time, had governed the pension schemes applicable to banks. This agreement was signed at a time when the conditions inherent in the running of the pension schemes for banks and the considerable imbalances recorded in certain pension funds of the banking sector did not permit a guarantee that the system could continue to function on a long-term basis.

The main thrust of this agreement is that banks give up their retirement scheme and become members of the nationwide multi-employer schemes, ARRCO and AGIRC. Those last schemes will, managed on a pay as you go basis, attribute prior service cost to the employees without payment of an extra premium.