FRANCE - The French government has delayed plans to detail the structure of its reserve fund (Fonds de Reserve), including the all important question of who will manage the funds assets – set to reach around a trillion francs by the year 2020.

The plans had been scheduled to appear in this year’s financial projections for French social security (Projet de loi de la financement de la securite sociale) but were withdrawn at the last minute for ‘technical reasons’.

Arnaud d’Yvoire of the Paris based Observatoire des Retraites, says the plans due to be unveilled by France’s council of administration on retirement (Conseil d’orientation des retraites) will now not see the light of day for another six months.

“For the moment the fund remains managed by the FSV - Fonds de Solidarite Vieillesse.”

“The proposal was that the administration be done by the Caisse des Dépôts and that the investment possibilities for the fund be open. But the big question was on the financial management of the assets.”

“Ten years ago we would have given this kind of investment straight to the Caisse des Dépôts, but today there are all the questions of competition at the European level.”

According to D’Yvoire the fund has generated returns of F7m since it was set up with initial capital of F2bn in 1999. The fund is invested in treasury bonds with a duration of two years.

By the end of 2000, the projected financial level of the fund should pass F23.3bn, and by 2001 F36.5bn. To reach its target of F1trn by 2020 the fund will need to be fed annual revenues of F30bn.