A new investment regulatory framework for ERAFP

20 September 2019

The order of 31 July 2019 has changed certain investment ratios for the French public service additional pension scheme (ERAFP), enlarging its capacity for asset diversification, which reprents more than 30 billion euros.

Effective 9 August 2019, the order of 31 July 2019 – amending the order of 26 November 2004 implementing decree no. 2004-569 of 18 June 2004 on the French public service additional pension scheme – reforms ERAFP’s investment framework as follows :
  • limit of investments in equities and funds of unlisted assets has increased from 40% to 45% ; 
  • limit of real estate investments has increased from 12.5% to 15% ;
  • the ratio of its total real estate debt to its investments' book value has been raised from 25% to 50% (real estate leverage) ;
  • the cap on ERAFP's direct investment in undertakings for collective investment (UCI) has increased from 3% to 10%.
ERAFP's board of directors and management welcome this development, which increases its investment policy's scope for maintaining a well-balanced portfolio over time as well as its responsiveness – particularly useful additions in the current economic environment.