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State aid: Commission gives conditional authorisation for public aid to finance La Poste pensions for civil servants

European Commission - IP/07/1465   10/10/2007

Other available languages: FR DE

IP/07/1465

Brussels, 10th October 2007

State aid: Commission gives conditional authorisation for public aid to finance La Poste pensions for civil servants

Acting under the EC Treaty rules on state aid, the European Commission has authorised the aid planned by France for the reform of the arrangements for financing the retirement pensions of civil servants working for La Poste. The authorisation 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.

Mrs Neelie Kroes, Competition Commissioner, stated: “At a time when further steps are being taken to liberalise the postal market, this reform helps to provide a level playing field for La Poste and its competitors".

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, finalising La Poste's transition to the status of an ordinary competitor, provides for the operator to pay an "employer's" contribution at a competitivel 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.

In its analysis the Commission stresses that the liberalisation of the postal sector has been an ongoing process since 1998. Initially liberalisation in the postal sector was restricted to letters weighing over 350g, the price of which was less than five times the public tariff applicable to an item of correspondence in the first weight step of the fastest standard category where such category exists. In 2003 the weight limit was lowered to 100g and the price to less than three times the public tariff, and then in 2006 to 50g and the price to less than two and a half times the public tariff.

The 1998 ceiling and the 2006 reform of the pensions scheme applicable to La Poste are important steps in adapting the enterprise to the gradual liberalisation that started in 1998, with a view to full liberalisation of the French postal market. Liberalisation of postal markets across the EU has an important role to play in the Lisbon strategy for growth and employment. The Commission believes that liberalisation of the postal sector could be hampered if planned pension reforms, like the one in question, were not approved.

Further information

La Poste employs staff with two different statuses:

  1. 172 000 civil servants. When La Poste was given legal person status by the Act of 2 July 1990 on the organisation of the public service of La Poste and Télécommunications, no change was made to the position of the staff of the postal administration who went to work for La Poste. The Government promised that the civil servants working for La Poste would retain their status. The Commission's decision does not affect the individual situation of the civil servants working for La Poste, as regards their pension rights, their contributions or their status.
  2. 132 000 employees under private

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