The French asset management association has proposed creating a pan-European personal pensions product as one of a host of measures to boost the standing of the country’s industry.
The Association française de la gestion financiére (AFG) set out 10 measures in a “roadmap” for the French asset management industry.
Unveiled last week, the white paper is the result of work carried out over the past few months on the competitiveness of the industry and Paris as a financial centre, and has some overlap with a report recently produced by a “FROG” working group of the AFG and the market regulator, AMF.
Didier Le Menestrel, chairman of the AFG competitiveness commission, said: “Everyone is working towards the same objective – to mobilise savings to foster economic growth.
“Our industry has the legitimacy and all the attributes required to meet the long-term savings needs of the citizens of Europe, particularly in the crucial field of pensions.
“The implementation of the measures we are proposing today will help to give it a decisive advantage.”
The association said the 10 measures in its white paper could increase the take-up of French funds by foreign investors and boost the competitiveness of the country’s asset management industry, as well as create opportunities for long-term investment in the real economy.
“The rapid adoption of the entirety of these measures will enable the real challenge of the 21st century to be tackled – pensions for 500m Europeans,” it added.
The country’s asset management association wants to see the creation of individual and “exportable” pension saving products, saying this would address the pressure on pay-as-you-go (PAYG) pension systems and tie in with current discussions at the European level about pan-European personal pension products (PEPPs).
The AFG is planning to set out details of its vision for personal pension savings in a white paper specifically on retirement saving that it aims to publish by the end of the year.
It said France’s PAYG pension system was close to “asphyxiation”.
And although France has one of the highest savings rates in Europe, two-thirds of the accumulated assets are in real estate, according to the AFG.
It said that, while there had been strong recent growth in certain life insurance products, these were not a pensions solution.
The AFG said new voluntary savings products exclusively for the purpose of financing pensions were needed.
In France, this could help overcome the incessant debate over a funded versus a PAYG system, and individual pension saving products would also represent a “decisive” first step towards an efficient Capital Markets Union, it said.
It added that creating new products in the vein of the PEPP being discussed at the European level would require changes to the regulatory framework, and that it would set out ideas about this and fiscal treatment in its upcoming white paper.