Investment strategy and Socially Responsible investment

General overview

The FRR’s mission as conferred by law is to “manage the sums that are allocated to it, to build up reserves to help ensure the long-term future of eligible retirement plans”.

The Fund is also responsible for the financial management of a portion of the exceptional, one-off, lump-sum contribution owed to the CNAVTS (Caisse Nationale d’Assurance Vieillesse des Travailleurs Salariés).

Acting on the Executive Board’s proposals, the FRR’s Supervisory Board determines the general guidelines underlying the investment policy for the Fund’s assets.

This is dependent on:
  1. a hedging compartment whose main objective is to ensure the FRR is certain of honoring its liabilities;
  2. a performance compartment whose objective is to provide additional returns.

The government has set out a timetable for the payout of the Fund’s assets. Under the terms of the social security financing law 2011,“the sums allocated to the Fund are held in reserve until 1st January 2011. As from this date and up until 2024, the Fund shall each year, and at the latest by 31 October, pay 2.1 billion euros to the Caisse d’Amortissement de la Dette Sociale (national social debt amortization fund) to help finance, between 2011 to 2018”the deficits of the entities that administer the basic old age pension.

On this basis the FRR determines the general investment policy guidelines consistent with“the principles of prudence and risk diversification given the target timetable for utilisation of the Fund’s resources, in particular the above-mentioned payout obligations”.In its implementation, the aim of the FRR’s investment policy is also to help finance economic actors in general and businesses in particular. This in turn helps to consolidate their prospects for long-term growth and promote sustainable wealth creation and job growth. At the same time, it is consistent with certain shared values that promote balanced economic, social and environmental development. In 2008, the Supervisory Board adopted a responsible investment strategy which seeks to enable the Fund to honour its commitments as a signatory to the UN’s PRI (Principles for Responsible Investment).

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