An insurance policy to guarantee pensions

Judge’s comment: “A streamlined investment process that maintains a low cost structure while maintaining a minimum guaranteed rate of return”

Founded by companies for companies in 1925, Intégrale is an open multi-employer structure offering a range of defined benefit, defined contribution and cash-balance occupational pension arrangements. Its wide-ranging membership includes companies, institutions, pension funds and self-employed workers on an industry-wide basis.

With a cost framework set at a maximum of 60 basis points (bps), the current cost ratio is 44bps. One of the key objectives is covering its 1.6% return guarantee and the fund’s long-term performance averages at 5.75% over the past 25 years.

Intégrale’s conservative strategic asset allocation allows for a 20% total equity weighting alongside a minimum bond quotient of 55%. Real assets, including infrastructure, have a 25% overall maximum. Cash, loans and other fixed income products make up the rest.

At 31st December 2014, Intégrale’s actual asset allocation comprised:

  • bonds: 63.8%
  • real assets: 20.7%
  • equities: 5%
  • cash: 8.7%
  • other: 1.8%

Intégrale’s ambition is to increase its 25% strategic real assets allocation to 30%. Real estate and in particular, diversifying into nursing homes, have been at the heart of its recent activity, with equity exposure replaced progressively by euro medium-term note debt instruments to reduce risk while maintaining secure and stable returns.

Intégrale reviews its asset allocation at least every quarter. Several committees participate in the process to monitor and determine the asset mix. The investment committee begins by proposing the optimal asset allocation to match liability cash-flow needs in an approach that mimics a traditional liability-driven strategy in many respects to ensure the fund meets its liabilities and its guarantee rate while optimising the risk-return ratio for the rest of the portfolio. This needs to take full account of the statement of investment principles that the financial committee and board of directors both approve.

As part of an insurance group, Intégrale benefits from the best of two worlds. The pensions sector allows it to seek higher returns, concentrate on communication while maintaining transparent governance, low costs and voting rights at the companies it invests in. The insurance world provides security through solvency margins according to the principles of both Solvency I and II; its minimum interest guarantee; low volatility; risk management; actuarial functions; regulatory compliance; internal control mechanisms; as well as both continuity and disaster recovery plans.  

To supplement its asset allocation processes and strategy as part of its governance framework, Intégrale is committed to streamlined and appropriate risk management and monitoring. Its model concerns three main lines of defence: internal control procedures, control functions and auditing. Although the decision-making process involves different layers, its structure nonetheless means it can take a new asset allocation decision within a few days if an opportunity presents itself and circumstances, such as market downturns, downward pricing trends of securities and strategic limits of exposure, permit the scheme to do so.

Each investment – or indeed divestment – takes full account of Intégrale’s comprehensive risk assessments and its solvency requirements. 

This involves a process that comprises several steps, including:

  • defining cash-flows, asset and liability objectives, and forecasts;
  • defining risk capacity, limits and appetite;
  • undertaking quantitative measurement of associated risks;
  • reporting;
  • adjusting and taking appropriate action where any risk limits have been exceeded.

Once this multi-step process is complete, Intégrale issues a comprehensive report outlining both the retrospective and prospective processes and management it needs to enact to protect itself or benefit from the risk it uncovers.

2014 Essentials


Founded in 1925

Hybrid multi-employer


  • active: 71,505
  • retirees: 56,569
  • deferred: 1,474

Assets: €2.7bn

Performance as a percentage:

  • one year: 3.41
  • three years: 3.49
  • five years: 3.65
  • ten years: 4.21

Quick facts

  • Hybrid structure featuring both insurance and pensions characteristics
  • Low equity exposure and low-cost framework offering minimum guarantee
  • Comprehensive multi-layered risk assessment


  • Amonis OFP
  • Flemish Care Provident Fund
  • Pensioenfonds UZ Gent OFP
  • United Pensions