France promulgates law paving way for pension fund vehicles
A French law providing for IORP-compliant pension vehicles in the country has been promulgated, and the decree creating the pension funds is due to be out in the first quarter of 2017.
Sapin II, as the law is colloquially referred to – named after the French finance and economy minister Michel Sapin – was officially published on 10 December, having been adopted in the country’s parliament on 8 November.
A draft of the law was presented at the end of March.
The omnibus legislation includes an article – Article 114 – providing for the creation of a new type of legal entity for pension provision, a “fonds de retraite professionelle supplémentaire” (FRPS).
The vehicle will be governed by a regulatory regime compliant with the EU Institutions for Occupational Retirement Provision (IORP) Directive.
The details about the new vehicles, which are also being referred to as pension funds “à la française” – will be set out in a separate ministerial order.
A draft of this is being discussed by the industry, IPE understands.
A spokeswoman for the French finance ministry confirmed to IPE that the final ministerial order was due to be published in the first half [corrected from first quarter] of 2017.
The idea behind the FRPS is to allow insurers to shift supplementary pensions into the new legal entity, freeing them from capital requirements under Solvency II.
These are seen as favouring sovereign bonds to the detriment of return-seeking assets and economic growth, which the Sapin II law seeks to boost.
The government has previously said that some €130bn worth of assets would be eligible for the transfer to FRPS vehicles.
In France, the bulk of pension provision is on a pay-as-you-go basis, and, outside of that, pension provision is typically insurance-based.
ERAFP, which runs the mandatory supplementary pension scheme for civil servants, sees itself as France’s only pension fund.