The new French company pensions law should be a guaranteed success according to a survey carried out by Frank Russell Paris for Groupe AXA.

Sixty-nine per cent of the companies surveyed aim to set up plans under the new law. A total of forty companies responded to the survey, carried out at the end of last year, which was sent to 200 of the largest companies in France.

Most companies prefer to take a medium term view of the changes with a total of 69% believing that the plans will be indispensable to their strategy for employee benefits three years from now.

Frédéric Jolly, Président Directeur Général of Frank Russell in Paris, which carried out the survey said: I think it will take several years for the funds to take off, until corporations implement the new pension scheme.”

Jolly added that the changes might look more dramatic from outside France than domestically, but he added that the money management industry, the banks and the insurance industry were currently preparing their strategy for addressing the new market.

The survey shows say that 59% will select money managers following a competitive tendering process. In a consideration of asset classes 62% deemed equities a very appropriate vehicle for fund investment. Forty-nine per cent rated bonds as very appropriate with none of the companies expressly favouring propertyor short term instruments, a reflection of the changing returns available from the different asset classes in the French market.

Sixty per cent of the sample say that they would want to set up a fund on an individual company basis with 40 favouring plans involving groups of companies.

Independent asset managers are the preferred institutions for investing pension fund assets. They are selected by 38% of companies, followed by insurance companies on 32% with 17% for banks and 13% for pension fund companies.

The companies also indicate that they would use investment consultants and actuaries for advice on the construction of schemes and on investment strategy.”