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Ircantec

PRI reporting framework 2017

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Basic Information

OO 01. Signatory category and services

01.1. Select the type that best describes your organisation or the services you provide.

01.2. Additional information. [Optional]

IRCANTEC is a French public sector supplementary pay-as-you-go pension scheme which manages pensions for nearly 4.9 million pensioners and active public-sector employees, including both national and local government employees and those working in hospitals. The scheme's responsibilities include a huge deferred membership as its future pensioners are non-civil service contract staff who have been employed in the public sector at least once in their lifetime. Ircantec thus manages part of the future pensions of 16 million workers in France. The scheme has statutory reserves (€9.8 billion on December 31st , 2016) managed in the medium and long term to guarantee the payment of pen­sions.

Ircantec defines its investment policy by three major concerns without any one of them taking precedence over the others:

• acting in the best long-term interests of its beneficiaries,

• optimizing the performance of its investments over the long term within risk limits accepted by the Institution. Financial performance is not the only objective,

• maintaining the consistency of the investment policy – while upholding its own collective values.

 

Ircantec’s identity shapes its values: the pay-as-you-go system binds together generations in a spirit of solidarity and equity. To ensure fairness between generations, Ircantec has identified its priority as maintaining long-term capital which will contribute to the quality of life of future pensio­ners: financial capital for the payment of pensions, as well as the environmental capital and social capital.

 

The importance given by the Institution to intergeneratio­nal solidarity gives meaning to its responsible investment approach which must meet three requirements:

• guarantee payment of pensions to current and future pensioners,

• contribute to preserving the natural environment for cur­rent and future pensioners,

• participate in social progress for current and future pensioners.

The value of intergenerational solidarity is also evident in the work of the Social Fund and the scheme’s patronage policy.

Aware of its responsibilities to its members and society, on December 18th 2008, the Ircantec Board of Trustees decided to adopt an SRI (Socially Responsible Investment) approach for its portfolio of assets. The Board took its inspiration from the preamble to the six Principles for Responsible Investment (PRI1) of the United Nations (UN):

«As institutional investors, we have a duty to act in the best long-term interests of our beneficiaries. In this fiduciary role, we believe that environmental, social and corporate governance (ESG) issues can affect the performance of investment portfolios (to varying degrees across compa­nies, sectors, regions, asset classes and through time). We also recognize that applying these Principles may bet­ter align investors with broader objectives of society».

 

On April 5th, 2016 the board of trustees has unanimously adopted a 4 years roadmap for investments based on four pillars:

1.         In the context of increasing reserves, optimize the return on investments over the long term, within the limits of the risks accepted by the Institution and in line with its Responsible Investor Charter;

2. Strengthen the responsible investor approach;

3. Enroll in an investment trajectory compatible with a 2 ° C scenario by integrating climate issues into investments, and financing the transition to a low carbon economy, consistent with national and international commitments to limit global warming Climate change;

4. To be a benchmark investor in the field of supplementary retirement at European level, open to its peers and stakeholders in France and internationally.

Ircantec’s SRI approach aims to be simple and pragmatic, progressive.

 

Implementation of SRI principles

SRI principles also need to be integrated by all those in charge of the managing the scheme’s reserves.

• The Board of Trustees (34 members) :

- defines the general guidelines for the SRI policy; it vali­dates updates and extensions by referring to research work and exchanges with other investors,

- verifies the implementation of the principles by perio­dically reviewing their degree of integration into management processes; it supports its analysis by non-financial reports provided by a non-financial rating agency,

- refers to the Technical and Financial Steering Committee responsible for preparing the work of the Board relating to the scheme’s investment policy.

 

In terms of day-to-day management, Caisse des Depots (CDC), the French state long-term investment and economic development institution, acts as administrative fiduciary manager of our scheme. As portfolio management is outsourced to various external asset managers, on the implementation of Ircantec’s SRI strategy, CDC :

- assists the Board in developing its SRI policy and making proposals for its evolution in this context; it monitors developments in the SRI field,

- communicates the Institution’s SRI policy to mana­gement companies and ensures compliance with the principles in the performance of their duties,

-  periodically reports to the Board of trustees on the application of SRI principles in investment strategies.

Asset management companies:

- integrate Ircantec’s principles in their methodology and investment process,

- invest in line with the strategy and principles defined by the Board,

- notify how SRI principles are implemented in their mana­gement of and warn of any difficulties of application,

- identify and monitor the risks the financial investments may incur for the image and reputation of the scheme.

Asset management companies are selected by tender in view of their financial capabilities and their ability to meet the needs of Ircantec in this area. These companies must be PRI signatories and those who have not signed up must be able to explain their position.

 


OO 02. Headquarters and operational countries

02.1. Select the location of your organisation’s headquarters.

France

02.2. Indicate the number of countries in which you have offices (including your headquarters).

02.3. Indicate the approximate number of staff in your organisation in full-time equivalents (FTE).

674 FTE

02.4. Additional information. [Optional]

Our Board is composed of 34 members who rely on our fiduciary manager, the public institution “Caisse des Depôts et des Consignations” (thereafter “CDC”) for day-to-day management. 674 FTE are in charge of managing the relationship with employers and affiliates (including pension payments) and investments. 12 FTE are in charge of investments of which 2 FTE are dedicated to RI policy, strategy and follow up.


OO 03. Subsidiaries that are separate PRI signatories

03.1. Indicate whether you have subsidiaries within your organisation that are also PRI signatories in their own right.

03.3. Additional information. [Optional]


OO 04. Reporting year and AUM

04.1. Indicate the year end date for your reporting year.

31/12/2016

04.2. Indicate your total AUM at the end of your reporting year, excluding subsidiaries you have chosen not to report on.

Total AUM
trillions billions millions thousands hundreds
Currency
Assets in USD
trillions billions millions thousands hundreds

04.4. Additional information. [Optional]


OO 06. How would you like to disclose your asset class mix

New selection options have been added to this indicator. Please review your prefilled responses carefully.

06.1. How you would like to disclose your asset class mix.

Internally managed (%)
Externally managed (%)

 

Listed equity 0 0 10-50% 36.9
Fixed income 0 0 >50% 58.8
Private equity 0 0 <10% 0.25
Property 0 0 <10% 3.7
Infrastructure 0 0 <10% 0.25
Commodities 0 0 0 0
Hedge funds 0 0 0 0
Forestry 0 0 <10% 0.1
Farmland 0 0 0 0
Inclusive finance 0 0 0 0
Cash 0 0 0 0
Other (1), specify 0 0 0 0
Other (2), specify 0 0 0 0

06.2. Publish our asset class mix as per attached image [Optional].

06.3. Provide contextual information on your AUM asset class split. [Optional]

The board of trustees has adopted a new strategic asset allocation on December 13th, 2016, as described on OO 06.2 . We have lowered our sovereign bond exposure and increased our credit exposure. We are currently committed to invest around 8% of our AUM in real Assets of the 10% allowed (5% in real estate, and 3% in private equities, private debt or Infrastructure). As we started to invest in private equities, private debt or Infrastructure in 2015, our current exposure is limited.

Ircantec has dedicated 4.5% of its global AUM to finance the energy transition through greenbonds (330 millions EUR, around 3.4% of AUM), and a 1.1% committment in "green infrastructure".


OO 07. Fixed income AUM breakdown (Private)


OO 08. Segregated mandates or pooled funds (Private)


OO 09. Breakdown of AUM by market

09.1. Indicate the breakdown of your organisation’s AUM by market.

 

 

Developed Markets

 

 

Emerging, Frontier and Other Markets

Total
100%

09.2. Additional information. [Optional]


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