Mandatory executive provident scheme: the 1.50% contribution and its pitfalls

Quick answer. Since 1947, every company employing managers must cover them with collective provident insurance. The obligation requires a contribution entirely at the employer's expense, set at 1.50% of salary below the monthly Social Security ceiling (PMSS 2026 = €4,005). Article 1 of the national interprofessional agreement (ANI) of 17 November 2017, extended by the order of 27 July 2018, requires the contribution to be allocated in priority to death cover, without setting any rate: the 0.76-point minimum quoted everywhere comes from joint-body doctrine, not from the text. If an employer provides no cover and an executive dies, the employer must pay the beneficiaries a sum equal to 3 times the annual Social Security ceiling in force at the date of death (i.e. 3 × €48,060 = €144,180 in 2026). Non-managerial employees are covered by no interprofessional provident obligation: only their industry-wide collective agreement can create one.

The mandatory provident scheme for managers did not originate yesterday. It stems from Article 7 of the National Collective Convention for Managers (Convention collective nationale des cadres) of 14 March 1947, a foundational text in French managerial labour law. When AGIRC and ARRCO (complementary pension schemes) merged on 1 January 2019, this collective convention ceased to exist as a standalone instrument. The National Interprofessional Agreement (ANI) of 17 November 2017 on managers' provident cover took over: its preamble states that it modernises the provident rules of Article 7 of the 1947 convention and makes the 1.50% rate permanent. The obligation therefore now sits in Article 1 of the ANI of 17 November 2017, not in an "Article 7" that no longer stands on its own.

One legal point is almost always omitted: an ANI is an agreement between social partners, not a statute. What makes it binding on every employer within its scope is its extension by the order of 27 July 2018 (Official Journal of 14 August 2018), issued under Articles L. 911-3 and L. 911-4 of the Social Security Code. This is an extended contractual obligation: neither optional, nor avoidable on the ground that the 1947 convention disappeared.

The rationale for this obligation? Protecting executives and their beneficiaries against risks of serious illness, disability, and death. In 1947, it was groundbreaking. Today, in 2026, it is routine law, yet catastrophic if breached.

Definition and calculation basis#

The mandatory contribution is calculated on the portion of pay below the Social Security ceiling: historically "Tranche A", renamed Bracket 1 (tranche 1) since the AGIRC-ARRCO merger of 1 January 2019. It is the share of gross salary between €0 and the monthly ceiling. In 2026, the PMSS stands at €4,005/month, equal to an annual ceiling (PASS) of €48,060.

Concrete examples:

• Executive 1: gross salary €3,000/month → provident basis = €3,000 → contribution due = €3,000 × 1.50% = €45
• Executive 2: gross salary €5,000/month → provident basis = €4,005 (capped) → contribution due = €4,005 × 1.50% = €60.08
• Executive 3: gross salary €10,000/month → provident basis = €4,005 (capped) → contribution due = €4,005 × 1.50% = €60.08

Exclusive employer obligation#

Unlike Social Security contributions, which are shared between employer and employee, the 1.50% provident contribution is entirely borne by the employer. It cannot be passed on to the executive's net salary or deducted from pay.

The term "manager" is not monolithic. The 2017 ANI defines two categories of beneficiaries, plus an extension mechanism:

1. Engineers and managers (Article 2.1): engineers and managers as defined by the wage-classification orders, but also sales representatives meeting one of the three criteria set by the agreement (technical, administrative or commercial training equivalent to that of managers, authority over other representatives, or duties involving initiative and responsibility), company directors otherwise unlisted and treated as employees for Social Security purposes, salaried doctors, as well as approved legal counsel and plant directors. Membership therefore does not rest on the mere "manager" title written into the contract.

2. Assimilated employees (Article 2.2): clerical staff, technicians and supervisors assimilated to engineers and managers when they hold positions rated at a gross hierarchical index of at least 300, or an equivalent position in the classifications that replaced the wage-classification orders. This is a classification test, not a free assessment of duties nor an industry agreement.

A third mechanism, often forgotten, still exists: the former "Article 36" of Appendix I to the 1947 convention, carried over in the annex to the 2017 ANI as AGIRC deliberation D20. It allows the scheme to be extended, by a convention or agreement concluded at national or regional level (company-level agreements are excluded), to holders of positions rated at a gross hierarchical index of at least 200.

Since decree no. 2021-1002 of 30 July 2021, applicable from 1 January 2022, the reference to Articles 4, 4 bis and 36 of the 1947 convention has disappeared from supplementary social protection law: Article R. 242-1-1 of the Social Security Code now refers to Articles 2.1 and 2.2 of the ANI to define objective categories, any broader category having to result from an extended industry agreement or an approval. The 2026 reflex is therefore to read the classification applied to the employee first, then the instrument setting up the scheme in the company.

This distinction is critical: an employer cannot circumvent the obligation by withholding the "manager" title from an employee whose classification places them within the scope of the agreement.

The ANI does not require the employer to concentrate the 1.50% solely on death cover. Its Article 1 provides that the contribution is "allocated in priority to death benefits", without setting any rate. The 0.76-point threshold, i.e. more than half of the 1.50%, appears in no published text: it comes from the historical joint-body interpretation by AGIRC, followed in practice by insurers and industry branches. We present it for what it is, a widely applied market doctrine, and not as an enforceable rule of law.

The balance may finance other provident guarantees: daily allowances for work incapacity, disability annuity, spouse or education annuities. Contracts call this "supplementary provident protection". Charging health-care costs against this 1.50% is, by contrast, a debated point on which the ANI is silent: do not rely on it without written confirmation from your insurer.

This is where the real danger emerges. If an employer fails to subscribe to a provident scheme or misses contributions, and an executive dies, the financial consequences are catastrophic.

Penalty amount#

If an uninsured executive dies, the employer must pay the beneficiaries a sum equal to 3 times the annual Social Security ceiling (PASS) in force at the date of death. This basis matters: the ceiling used is neither the one of the hiring year, nor the one of the year the contribution was missed, but the one applicable on the day of death.

In 2026, the PASS is set at €48,060. The sum owed = 3 × €48,060 = €144,180.

This is enormous for an SME. It compounds with:

• Costs of replacing the deceased executive (recruitment, temporary staffing, training)
• Litigation risks with heirs (claims for additional damages)
• A URSSAF reassessment risk: employer contributions to supplementary social protection escape the contribution base only if the scheme meets the conditions set by the Social Security Code; failing that, they are reinstated in the base
• Civil liability of the employer towards the beneficiaries

The inescapable nature of this obligation#

This payment to beneficiaries is not an administrative fine: it is an extended contractual obligation, arising from Article 1 of the ANI made binding by the order of 27 July 2018. Beneficiaries can claim it by simple demand letter, then in court. Limitation is not unlimited, however: absent a special rule, the claim falls under the ordinary five-year limitation period of Article 2224 of the Civil Code, running from the day the right holder knew or should have known the facts allowing them to act. A shorter period may be argued depending on the legal basis invoked: do not treat the passage of time as a defence.

Micro-enterprises and sole traders#

A business under the micro regime can perfectly well be an employer. The 2026 micro-regime thresholds are €203,100 excl. VAT for the sale of goods and accommodation, and €83,600 excl. VAT for BIC services as well as BNC professional activities: do not confuse them with the VAT-exemption thresholds, which follow different figures. If such a business employs even one manager, the obligation applies, at €60.08 per month at ceiling level. A manager remains a manager, including in a micro-structure.

Managers on part-time or internship#

• A part-time manager (25 hrs/week) remains a manager. The contribution is levied on the pay actually made, within the limit of the ceiling: it is not the contribution that is prorated, but where applicable the ceiling itself, under the Social Security proration rules.
• A manager-level intern: under an internship contract, they are not an employee in labour law; the obligation theoretically does not apply. But under a permanent contract with a "manager" title, the obligation applies from day one.

That absence of employee status does not remove every financial obligation for the host company, which may still owe a minimum internship allowance governed by its own calculation rules and its own contribution regime. Before applying the reasoning used for a manager on the payroll, it is worth checking the 2026 internship allowance threshold and its payroll treatment, which sets out when the allowance is compulsory and what is exempt.

Remote or expatriate managers#

• Remote work: no impact. Once the contract says "manager," the provident obligation applies.
• Employees working abroad: the shortcut "paid by a French entity, therefore covered" does not hold. What matters first is affiliation to the French Social Security scheme, for instance for a posted employee who remains attached to it. An expatriate employee affiliated to a foreign scheme falls outside this logic: have the situation qualified before concluding.

Enterprises with no managers#

If an SME employs only non-managers (workers, clerks, technicians), there is no 1.50% provident obligation.

Provident cover for non-managers: what does the collective agreement say?#

Direct answer. No interprofessional provident obligation applies to non-managerial employees: the ANI of 17 November 2017 covers only the categories defined in its Articles 2.1 and 2.2. Many industry-wide collective agreements, however, do set up a provident scheme for non-managers (work incapacity, disability, death), with their own rate and their own employer/employee split. Legifrance lists, for instance, an agreement of 23 October 2023 on the collective provident scheme for non-managerial employees. In short: nothing to do on the ANI side, everything to check on the industry side.

Where to check, in order. (1) The IDCC code applicable to the company, shown on the payslips; (2) the text of the collective agreement and its provident amendments, on Legifrance; (3) the instrument setting up the scheme within the company (unilateral decision, collective agreement or referendum), which must describe the categories covered; (4) the insurer's contribution call, to confirm that non-managers actually appear on it. An industry agreement may impose a rate, a split, a floor of guarantees, even a recommended insurer: these four readings go together, never one without the others.

Do not confuse three separate obligations. Provident cover for managers comes from the extended 2017 ANI: 1.50% of Bracket 1, entirely at the employer's expense. Group health cover comes from the Law of 14 June 2013 and concerns all employees, managers and non-managers alike, with at least 50% employer financing. Provident cover for non-managers falls under neither: it depends on the industry agreement. A company can therefore be fully compliant on health cover and entirely exposed on provident cover for its non-managers, or the reverse.

The most frequent case: a mixed workforce. A company employing both managers and non-managers combines the two logics, the 1.50% of Bracket 1 for the former, the industry scheme if any for the latter. A single contract may cover both populations, provided the instrument setting up the scheme clearly distinguishes the categories: it is this description in objective categories, within the meaning of Article R. 242-1-1 of the Social Security Code, that governs the social treatment of employer contributions.

Pitfall 1: Confusing provident cover with group health insurance. The most frequent confusion is to assume that group health insurance satisfies the provident obligation. It does not: the two obligations share neither source, nor purpose, nor scope of beneficiaries. Group health covers medical expenses. Provident covers work incapacity, disability, death.

Pitfall 2: Neglecting contract reviews. A provident contract signed in 2015 may allocate only a minority share of the 1.50% to death cover (0.60 point, say), below the 0.76-point joint-body reading. The employer thinks "it's settled" and never reopens the schedule of guarantees.

Pitfall 3: Forgetting to list all managers. Some employers subscribe to a provident contract but omit declaring several managers.

Pitfall 4: Declaring incomplete salaries. A firm pays €50k/year to an executive, but declares only €35k to the provident insurer (while classifying the remaining €15k as "non-insurable variable").

Pitfall 5: Believing a termination wipes the past clean. An employer engages a manager with no provident cover, then terminates the contract. The employer assumes they bear no responsibility. Wrong: the obligation ran for the entire period of employment, and that period is what will be examined, missed contributions included.

This obligation has a formidable feature: it stays invisible until a claim arises. A company can employ managers for years with no provident contract and nothing will flag it, neither on the payslip nor in the accounts, until a death makes the question irreversible. That is why this point is worth checking as soon as a first manager is hired, on a par with the pre-hire declaration or enrolment in group health cover.

The method comes down to four checks, all documentable. One: the instrument setting up the scheme exists (unilateral decision, collective agreement or referendum) and targets a valid objective category within the meaning of Article R. 242-1-1 of the Social Security Code. Two: the schedule of guarantees shows the share of the contribution allocated to death cover. Three: the list of insured members sent to the insurer matches the headcount actually paid, declared salaries included. Four: the contribution genuinely appears as a monthly outflow, not merely in a contract signed then forgotten.

The economics fit in one line: €60.08 per month for a manager paid at ceiling level, against €144,180 payable in 2026 if a manager dies uninsured. This is not a cost line to optimise, it is an exposure to close.

Hayot Expertise advice. Before hiring your first manager, or within a month if you have already done so, verify two things: (1) Do you hold a provident contract whose death-cover share is the majority of the 1.50% of Bracket 1, i.e. 0.76 point under the usual joint-body reading? (2) Are all your managers, including assimilated ones, declared to the insurer with their true salary? If the answer is "no" to either, approach your insurer or broker to regularise by amendment or new contract, and keep written evidence of the effective date. Setup fees vary between insurers; they remain out of all proportion to the €144,180 payable in 2026 if an uninsured manager dies.