As with pension fund associations elsewhere across Europe, the Association Française des Regimes et Fonds de Pension (Afpen) has found itself devoting a large amount of its time to domestic pensions reform, and, to a lesser extent, the European pensions directive for occupational schemes.
“These reforms are the widest-ranging set of changes to the French retirement market for decades. They are essential and despite the social and civil unrest they have caused in the shape of union protests and widespread strike action, they will be implemented come what may. There is no turning back and our work is only just beginning,” says Vincent Vandier, general secretary of the Paris-based organisation.
Vandier says liaising with social groups such as the unions and employers lies at the heart of the solution to the problem of re-education. “Many feel the new laws are an unfair imposition but don’t understand the basic underlying demographic versus economic scenario. It is a radical shake-up of an outdated, creaking system. To draw a simple analogy to underline what is happening here, where we are now with pension fund financing is where the UK and other developed pensions markets were in the 1960s. We have to move to a funded-style system, where both employee and employer contribute towards the new capitalised pension fund style savings vehicles. Devising the vehicles, educating all parties concerned and ensuring a smooth transition, at least technically, is probably where the bulk of our work lies in the coming years,” he adds.
Vandier says Afpen has drafted a four-part mission statement to clarify its role in the new French pensions landscape. “We aim to be a centre for discussion and proposal, to establish a code of practice for the new pensions vehicles, to define normal working and technical standards and to distribute and circulate information on the new funds.”
As far as the European directive
on occupational pensions is concerned, Vandier says Afpen is enthusiastic about its development but thinks that realistically it will be at least another five years before it has any real bearing on the French market. “The new pensions savings law in France doesn’t take into account what Brussels would like to achieve with its directive. Whilst its the_directive’s concept raises all kinds of possibilities and could help pension funds in the long term, we believe it will need to be transposed to fit the French system, as it will to fit other national systems, and not the other way round. And I emphasise that the new French system was not drafted with the directive in mind,” he points out.
Vandier adds that though Afpen is watching the development of the directive closely and keeping its members informed accordingly, most observers in France feel the future of the French retirement provision market lies in the new four-tier pensions savings system as finally introduced this year. “Working on helping people to understand this new system, and I avoid saying to accept it as we have no choice now, is our priority. The European directive and what it could lead to is still pretty much a dream and the physical reality of European pension funds is still a long way off.”

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