BNP Paribas in bid to exploit pension reform
FRANCE - BNP Paribas is launching a pension Sicav to take advantage of changes in French pensions law.
The fund will be available for use both by employees and by individuals saving independently, as well as by group schemes.
It forms part of a new range of retirement products from the bank designed to service the French pensions market at a time of radical change.
The Fillon Law, passed in August this year, created two new schemes for retirement saving. These are a voluntary employee savings partnership plan for retirement (PPESVR) and an individual retirement savings plan (PEIR). Both are defined contribution schemes.
But a study commissioned by BNP Paribas showed that while the French see retirement as fresh start in life, they were generally ill-informed as to how they would finance it.
Hugues Colmant, chief executive of BNP Paribas Epargne Entreprise, said: “As a result of the law, more and more employees will want to know about the level of their pensions, and so more and more discussions will be taking place in companies. But most companies do not have their own schemes. "At BNP Paribas, we are in a position to advise companies in this area thanks to our new organisation."
The new fund will consist of 11 sub-funds across different asset classes, to achieve diversification. It will include a lifestyling option, with automatic switching from equities to fixed income securities if the investor so wishes. The switch will be made at five percent per year.
The fund – the merger of two existing BNP Paribas funds – is invested on a socially responsible basis. At 550 million euros, it is now the biggest SRI fund in France.
Alongside the fund, the bank will offer information tools, such as a pension calculator, telling investors how much they can expect to receive at retirement.
The bank has not yet been able to market the new fund, as the detailed pensions regulations are still to be published. Colmant said: “We do not expect that the details will come out by the end of the year. However, once they have been announced, the product launch will follow very rapidly, in weeks or even days.”