OD FLASH | PERCO: according to URSSAF, varying the employer matching contribution based on age is not compliant.

Pourvoi n°23-18.187 | Cour de cassation

Under a collective agreement concluded in 2007, an association established a Collective Retirement Savings Plan (PERCO) for the benefit of its employees. These rules provide for a determination of the employer’s matching contribution based on the amount of the employee’s contribution and the employee’s age (under or over 50 years old). Following an audit, URSSAF (social security authority) issued a notice of observation for the future to the association, calling into question the eligibility for social security exemptions associated with this Plan due to the age criterion used for the adjustment.

The association challenged URSSAF’s decision in court to have this notice of observation overturned. It argues that the determination of the employer’s matching contributions is permitted provided it results from the application of general rules and that the age criterion, applied collectively, does not violate the legal provisions governing employee retirement savings plans. It contends that the administrative authority had not raised any objections within four months of the agreement’s filing.

The Court of Appeal rejected all of its claims. It held that, while the Labor Code permits the adjustment of contributions based on general rules, the Social Security Code expressly provides that under no circumstances may an objective category of employees be defined based on age. It also ruled that the administrative authority’s failure to challenge the agreement at the time of its filing does not preclude URSSAF’s authority to issue observations for the future in order to put an end to a non-compliant practice.

The association appealed to the Court of Cassation, but the Court of Cassation dismissed its appeal: it ruled that the social security regime governing employer contributions to the PERCO, intended to support employees’ retirement savings efforts, is assimilated to employer’s contributions to fund supplementary pension benefits plans, which are excluded from the social security contribution base of assessment only if they benefit to all employees or to an objective category of employees defined on a collective basis. The High Court specifies that such a category cannot be determined based on the employees’ age, in which case  its collective nature is rebuked, and upholds the Court of Appeal’s decision to validate URSSAF’s observation for the future, regardless of the administrative authority’s silence at the time the agreement was concluded.

This ruling confirms a trend that has been at work since 2024 (Cass. Civ. 2, February 1, 2024, No. 22-16.581): the Court of Cassation implicitly recognizes the PERCO as a supplementary pension benefits plan within the meaning of Articles L 242-1 and R.242-1-1 and seq. of the Social Security Code. Companies must therefore ensure that they establish matching contribution rules in compliance with these provisions, whose requirements must be considered in addition to those of the Labor Code. Otherwise, the favorable social security treatment of PERCO matching contributions may be called into question; this applies equally to PERCOL plans established under the Pacte Act of 2019.