The European Commission has approved, under EU State aid rules, a French support scheme designed to reimburse rail freight companies for pension-related costs linked to former employees of SNCF, France’s national railway group.
The measure, which will run for ten years from 1 January 2025, has a total budget of EUR 225 million and aims to strengthen the competitiveness of France’s rail freight sector by easing the financial burden of historic pension contributions.
Scheme to cover statutory pension surcharge
The aid scheme will compensate operators for the so-called T2 surcharge, a statutory employer contribution used to finance additional benefits under the SNCF pension system.
Since 1 January 2020, SNCF employees who leave the company but remain in the rail industry retain their pension rights under this scheme. Their new employers must therefore pay the employer’s share of the T2 contribution, even if they are private-sector operators.
Under the approved plan, eligible companies active in rail freight transport, maintenance, or railway safety tasks in France will be reimbursed for the T2 contribution owed for qualifying staff. The measure applies to statutory employees already on the payroll of eligible firms as of 1 January 2025.
If an eligible employee changes job, the aid will transfer to the new employer, provided the company is also active in the rail freight sector.
Supporting recruitment and competitiveness
The Commission found that the measure will boost recruitment flexibility and retain skilled workers within the rail freight industry by eliminating a financial obstacle to hiring former SNCF employees.
France demonstrated that the scheme will support the development of the sector by removing a “legacy cost” that private operators have faced since market liberalisation, while maintaining continuity in workers’ pension coverage.
Limited, targeted and proportionate support
Following its review under Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU), which allows Member States to support the development of specific economic activities under certain conditions, the Commission concluded that the French scheme is proportionate, time-limited, and targeted.
According to the Commission’s assessment:
- The aid supports sectoral development by reducing non-competitive structural costs.
- It is necessary to ensure recruitment fluidity and workforce retention.
- It appropriately addresses the gradual phase-out of the SNCF statutory pension scheme within the freight sector.
- It is proportionate, covering only the actual cost of the T2 contributions owed, with a maximum budget of EUR 225 million.
On this basis, the Commission approved the measure as compatible with the internal market under EU State aid rules.
The Commission underlined that State aid granted under Article 107(3)(c) must facilitate the development of certain economic activities without distorting competition or trade within the EU to an extent contrary to the common interest.
This approval forms part of ongoing efforts to ensure a level playing field in Europe’s liberalised rail freight market, while addressing legacy obligations inherited from former public monopolies.
The non-confidential version of the decision will be published under case number SA.117491 in the EU State aid register on the Commission’s competition website once confidentiality issues are resolved. Future State aid decisions will also appear in the Competition Weekly e-News and the Official Journal of the European Union.
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