The court of appeal of Versailles has condemned the Cipav to reduction arbitrary of the pension of a self-employed entrepreneur. 300 000 people would be affected.

The judgment of the court of appeal of Versailles, march 8, 2018 is a first for the auto-entrepreneurs liberals. This decision, which was revealed at the end of June by the newspaper The Echoes, gives reason to a self-employed entrepreneur liberal who challenged the amount of his supplementary retirement pension.

Alain Taté had opted for self-entrepreneurship between 2010 and 2014. “At the time, my average monthly income was of the order of 2 900 euros, which I paid a total of 750 euros in contributions”, he remembers. A first conflict with the Cipav (Caisse interprofessionnelle de prévoyance and of old-age insurance (Cipav) (1) on the liquidation of his retirement allows him to discover that there was a problem with its complementary. It has the unpleasant surprise to learn that it does not have 192 points as he thought, but only 68. A shortfall that he estimated at about 360 euros per year.

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After a failed attempt to discussion with the Cipav, of which he is critical of “the guilty silence”, the man has decided to bring the case before the tribunal des affaires sociales (Tass) of Pontoise. Justice gives reason for the first time, but the Cipav’s appeal.

With this new decision, the court of appeal of Versailles pushes a little more the nail. It is estimated that the Cipav has “reduced randomness” of the pension rights of auto-entrepreneurs liberals who were affiliated. This last is condemned to pay him the number of points and the exact amount of additional pension to which he was entitled, as well as damages for “moral prejudice” and “failure to comply with its obligations to provide information and advice”.

A compensation mechanism

Everything is based on the method of calculation of points in the supplementary pension which is the very soul of the auto-entrepreneur status. It was established in 2008, it is thought of as “simple” and incentive. The payment of social security contributions is calculated according to a plan registered in 22.5% of the gross sales and possibly lower to pay the classical liberals. This fee is comprehensive and covers all social security contributions of the autoentrepreneur (health, retirement, supplementary retirement, disability…) that are managed by different funds.

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This is the Urssaf, which collects the package social. But it is up to the Cipav to set the number of points acquired in respect of the basic pension and the supplementary pension and to calculate the amount of the future pensions of the self-entrepreneurs. The number of points acquired in the material is proportional to the amount repaid by the Urssaf in respect of the supplementary retirement pension.

To make the main subject, enjoy the same social rights as other liberals without putting a strain on the budget of the funds concerned, the State had planned to put hand to the portfolio. The law has therefore provided a compensation mechanism until January 1, 2016 so that the pension fund is not penalised by a shortfall too important.

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“An allocation of points to be random and arbitrary”

The Cipav has taken this system of the “reduced fee” as a reference and subtracted arbitrarily to the level of contributions, without the prevent. And this is where the shoe pinches. “I was never informed of the reduction performed by the Cipav on the supplementary retirement pension points of self-entrepreneurs and it has even required that I go to court to obtain my statement of clear career,” laments Alain Taté. Worse, the Cipav has not assigned this reduction in a systematic way. “Some auto-entrepreneurs, with equivalent revenues, have achieved only nine points as a minimum and other more randomly. We were able to demonstrate in court,” says master Dimitri Pinch, lawyer for the complainant.

The classical liberal can claim a reduction of their contribution supplementary pension if their income has fallen. In exchange, they get less points for their future supplementary pension. It is a system of “reduced fee” intended for low-income. “It is an informed choice and consented to,” says Dimitri and Squeezed. This has not been the case for my client and for the auto-entrepreneurs.”

A billion euros to pay…or more?

In total, almost 300, 000 people who have been affected by this mode of calculation “unjustified”. “Anyone who has had even a quarter as an auto-entrepreneur may be concerned, unless it has less than 2 000 euros in turnover year-on-year,” warns master Pinch. A case for the explosive potential, already criticized by the Court of auditors on two occasions in 2014 and 2017. “The Court reiterates its recommendation to re-establish in the fullness of their rights to self-entrepreneurs concerned”, wrote the authors of the report in 2017. The human rights Defender is also gone to its critical length. In vain.

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Following the decision of the court of appeal of Versailles, the Cipav, in a news release, has evaluated the possible amount of the total bill to more than a billion euros and alerted the firm of Agnès Buzyn, the minister of Health, [which refers the matter to the directorate of social security].

Now, the Cipav is shown to be more measured. “It is impossible to estimate the cost of a hypothetical explosion in the number of appeals,” says does one side of the communication. One thing seems certain: if the complaints increase, the fund and, in turn, the State may have to pay a lot of money. And it won’t be. Master Pinching has identified a number of other problems. There is according to him a contradiction in the founding texts of the plan and those laying down the procedures for the supplementary pension of the members of the Cipav, which could expand the risk beyond 2016 (and after the end of the compensation mechanism) and to blow up the sums and the number of complainants, beyond the worst nightmares of the Cipav. A “bomb”, in his own words, for the moment, silent…

Only six cases before the justice

For the moment, only six cases have been brought before the courts. This is very few given the number of potential victims. “The code of social security does not begin in group actions, regrets, master Pinch. Only individual initiatives can be carried out.” However, all do not engage in a legal battle of several years. But most importantly, the auto-entrepreneurs do not measure the problem that when they arrive at the edge of retirement, and they wonder about their future pension.

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“The auto-entrepreneurs do not have contact with the Cipav in the course of their working lives as they pay their contributions to the Urssaf,” recalls master Pinch. Awareness is, therefore, often very late, once the insured is out of the system “Cipav”.

A reform of the Cipav could also dilute and even drown the problem. As of January 1, 2019, the auto-entrepreneurs having created their company before this date will benefit from the right of the option to join the general regime. “Many are likely to stop fighting to recover their supplementary retirement pension points”, laments master Pinch.

(1) The Cipav manages the basic pension and supplementary as well as disability-death of auto-entrepreneurs pursuing an activity of the liberal party.

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In the meantime, the Cipav has challenged the decision of the Versailles court of appeal and appealed in cassation. Anything to further delay the resolution of the long conflict against Alain Taté and discourage others from embarking in such a struggle.

(1) The Cipav manages the basic pension and supplementary as well as disability-death of auto-entrepreneurs pursuing an activity of the liberal party.