The French public pension fund for civil servants, Établissement de Retraite additionnelle de la Fonction publique (ERAFP), made an investment return of €3bn in 2023, it has reported.

Publishing its annual report, its investment return increased by €400m, up from €2.6bn in 2022. Its net investment flow saw contributions of €2.15bn in 2023, from 43,000 employers covering 4.5 million employees.

ERAFP’s financial assets, in economic terms, totalled €43.3bn at 31 December 2023, compared with €38.2bn in 2022. In terms of performance, the rate of return over one year was 8.8 per cent.

In recognition of the scheme's financial solidity in recent years, the board of directors decided to carry out a two-year repricing in 2024 and 2025, by decorrelating the service value and the purchase value of the ‘point’ (the unit used to calculate retirement benefits in the scheme). The technical yield therefore increased from 3.74 per cent to 3.81 per cent in 2024.

At the same time, the board increased benefits by 6.8 per cent on 1 January 2024, i.e. two points above inflation (the highest level among legally-mandated pension schemes). At the end of 2023, the scheme was financially robust, with a funding ratio after revaluation of 112.9 per cent (127.8 per cent taking into account unrealised gains on variable income assets and property), an increase from 2022.

Furthermore, as a 100 per cent SRI investor, ERAFP is strongly committed to environmental, social and governance issues.

“This year saw a decisive turning point in its implementation, with the adoption by the board in October 2023 of a policy on fossil fuels that is consistent with scientific recommendations. This will help to achieve the objective of aligning the portfolio with a temperature rise scenario of 1.5°C,” the fund noted.

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