Employer Action Code: Act
Law 1544 of 2023 establishes the Monaco Complementary Retirement Fund (Caisse Monégasque de Retraite Complémentaire – CMRC). Effective January 1, 2024, private-sector employees in Monaco will be required to participate in the CMRC, in place of membership in France’s AGIRC-ARRCO retirement plan (AA). Monaco employees have been required to participate in since 1964, but over the decades certain aspects of the respective national pension systems in France and Monaco have diverged (e.g., with regard to normal retirement age). Monaco has established the CMRC in order to have a program more aligned with its main social security retirement program and one over which it has more financial and administrative control.
- Effective January 1, 2024, participation in the CMRC will be compulsory for all private-sector employees in Monaco, replacing participation in AA. Benefit entitlements under AA for past periods of employment in Monaco of current employees will be transferred to the CMRC.
- Benefit eligibility criteria under the CMRC generally will be aligned with those applicable to Monaco state benefits, with a normal retirement age of 65 (differing from AA).
- Benefits under the CMRC, payable on retirement, death and disability, will be determined as under AA, at least initially, using a points-based defined benefit formula. Formula parameters (e.g., point value, reference value used in calculating points and covered pay ceiling) will be the same as under AA through September 30, 2024, and reviewed annually thereafter.
- Employer and employee contribution rates essentially will be unchanged, at least initially. Similar to the contribution d'équilibre general under AA, a certain portion of CMRC contributions will go toward ensuring the financial stability of the fund and will not generate points for members. However, there will be no equivalent of the AA’s contribution d'équilibre technique (also meant to shore up the fund’s financing) or a specific contribution toward employment services for cadre staff (Association Pour l'Emploi des Cadres).
- The CMRC will be administered by the central social security body (Monaco Social Fund) and managed through tripartite representation of the government, employers and unions.
Overall, the CMRC bears a strong resemblance to AA as well as to Monaco’s state pension system (which is also point-based). However, there will be some differences, in particular once the period through September 2024 has concluded. In addition, certain aspects of the CMRC still need to be clarified via government decrees. Employers should prepare for the transition (e.g., administrative changes to required reporting and payment of contributions) and monitor further developments.