OD FLASH | A ruling that provides certainty for employers: The inclusion of a group supplementary pension plan in a settlement agreement does not constitute a contractual commitment to provide that benefit, and the termination of such a plan, if effective before the former employee’s entitlement to benefits arises, is enforceable against the employee.

Court of Cassation, Labor Division, February 11, 2026 –  Pourvoi n°23-23.034 | Cour de cassation

As part of a group plan, a company unilaterally established a supplementary defined-benefit pension plan with discretionary benefits for senior executives. An employee in a management position was laid off at age 59 for economic reasons. He then entered into a settlement agreement with the employer stating that he “remains eligible” for the supplemental pension plan under the conditions set forth in the Plan Rules.

Following this settlement, the employer initiated proceedings to terminate the unilateral decision and the Pension Plan Rules: the works council was informed on February 1, 2019, of the proposed termination, and the affected employees were notified individually on March 1, 2019, effective August 31, 2019.

Believing he was entitled to this benefit, the former employee filed a claim with the labor court seeking, in particular, an order requiring the employer to pay the supplementary pension effective November 1, 2020, the date on which he began receiving his statutory retirement pensions (at age 62). He argued that he had thus fulfilled the condition of completing his career with the company, as required by the plan’s regulations for eligibility for the supplemental pension, since those regulations provided for the preservation of rights for employees laid off at age 55 or older, provided they did not resume any professional activity (a condition he also met). He maintains that the termination of the plan is unenforceable against him, since his rights were contractually established by the settlement agreement, and that the termination of the plan was unlawful in any event.

The Court of Appeal rejected all of his claims. It held that the settlement did not contractually establish entitlement to the supplementary pension, but merely reiterated that the employee remained eligible for the plan provided he met the conditions set forth in its regulations. It also ruled that since the employer’s commitment was of indefinite duration, the employer could validly terminate it. Since the employer had fully complied with the procedure for terminating unilateral commitments, this termination was enforceable against former employees, regardless of whether they had already left the company by that date.

The employee appealed to the Court of Cassation, but the Court of Cassation dismissed his appeal: it ruled that a mere reference in a settlement agreement to a supplementary pension plan arising from a unilateral commitment by the employer does not constitute a contractualization of the right to that plan, but merely reaffirms the former employee’s continued eligibility subject to compliance with the conditions set forth in the Regulations.

The High Court further notes that the plan involves a defined-benefit pension scheme with non-guaranteed benefits, where entitlement is contingent upon completing one’s career with the company. Since such a commitment is of indefinite duration, the employer may terminate it by notice provided that it follows a proper procedure for informing the employee representatives of the affected employees individually and sets a sufficient notice period. Having found that this procedure had been followed and that the termination had occurred before the former employee’s pension rights had been finalized, the Court of Appeal, according to the Court of Cassation, could conclude that the former employee had no vested rights under the plan.