The public sector additional pension scheme (RAFP) is a mandatory, points-based scheme created for fully qualified and trainee civil servants working in French central government (civilians and military), local and regional authorities and the public hospitals sector, as well as members of the judiciary. Thanks to the Scheme, close to 4.5 million contributors benefit from additional pension benefits.
The French public additionnal pension scheme (ERAFP) is the public-sector administrative entity that manages this pension scheme.
Organisation and operation
The RAFP was established by the 2003 pension reform law and has been operating since January, 1st 2005.
It provides civil servants with a supplementary income to the pensions paid by Caisse nationale de retraite des agents des collectivités locales (CNRACL) and Service des Retraites de l’État (SRE), the basic public service schemes for local authority and central government employees, respectively.
The Scheme works on a capitalisation principle. Each beneficiary thus has an individual RAFP retirement account that they can access and consult via their personal space and in which their RAFP points accumulate. Each year, the employer declares its employees’ contributions (the contribution rate being split equally between employer and employee, with each paying 5%), calculated on their ancillary remuneration up to a limit of 20% of the gross basic salary.
As a State-owned public institution, ERAFP applies principle of segregation of the functions of authorising entity and public accountant. The State appoints a Public Accountant with sole responsability, personal and financial, for paying ERAFP's expenses, collecting its revenues, handling funds and keeping its account.
The RAFP is a mandatory scheme aimed at all fully qualified and trainee civil servants in the three public service functions as well as members of the judiciary.
Who is the RAFP for?
Anyone who is a :
- civil servant, including on secondment;
- a member of the judiciary;
- a member of the military, whether permanent, under contract or a reservist...
... and who receives ancillary remuneration (bonuses, allowances, in-kind benefits, etc.) that the basic public service schemes do not take into account, contributes to the Scheme.
The following are excluded:
- local employees of territorial authorities or public hospitals in French overseas collectivities,
- civil servants with disponibilité (available) or hors cadres (expatriate) status,
- fully qualified civil servants who work fewer than 28 hours a week.
SRI values and financial management
The Scheme’s management has been entrusted by decree to Établissement de retraite additionnelle de la fonction publique (ERAFP), a State-supervised public administrative institution.
ERAFP’s core business is to manage the Scheme technically and financially so as to maximise the return on the assets it invests, which will form the basis of contributors’ future pension income once they reach their additional pension liquidation age.
Governed by strict prudential rules pursuant to article 28 of the decree of 18 June 2004, this management makes it possible to maintain a coverage ratio of at least 100%.
By its nature, ERAFP is therefore dedicated to the public interest and, in particular, highly attuned to social issues. Accordingly, as soon as it was created in 2005, it put in place an innovative and ambitious programme to implement a socially responsible investment (SRI) policy founded on public service values. This policy takes into account environmental, social and governance criteria in each of the Scheme’s investments.
As the only French public pension fund, ERAFP seeks to demonstrate that investors can serve the public interest without forgoing the financial return on their investments. It has thus targeted three specific areas for investment: the fight against climate change, support for economic activity and financing affordable housing for public sector employees.
It excludes from its investment universe all areas prohibited under French law or French-ratified international conventions.
These exclusions aside, as a large institutional investor ERAFP invests in all business sectors and asset classes.
Prudent and secure asset allocation
Frequently asked questions
What is a basic regime?
A basic or main regime is the first mandatory pension level.
All members of the working population subscribe to a statutory pension scheme called the basic regime, of which there are four main categories:
- the general regime for salaried workers,
- special regimes (civil servants, Retraite des Mines, SNCF, RATP, EDF, etc.),
- independent regimes for self-employed workers,
- agricultural regimes.
RAFP is not a basic regime but a mandatory additional regime that supplements the basic regime.
What is ERAFP?
In accordance with the provisions of article 76 of pension reform law no. 2003-775 of 21 August 2003, management of the French public sector additional pension scheme (RAFP) has been entrusted to Établissement de retraite additionnelle de la fonction publique (ERAFP), a State-supervised public administrative institution.
The Scheme’s administrative management, meanwhile, has been entrusted to Caisse des Dépôts et Consignations (CDC), under the authority and control of the board of directors.
In partnership with the Scheme’s administrative manager, ERAFP provides a range of paperless information services for civil servants and their employers.
Pursuant to article 16 of decree no. 2004-569 of 18 June 2004 relating to the public sector additional pension scheme, “it centralises the Scheme’s income and expenses in its accounts and pays the benefits to its beneficiaries”.
ERAFP’s chief executive officer is appointed by joint order of the minister responsible for the public service, the minister responsible for the budget and the minister responsible for social security.
ERAFP is currently headed by Laurent Galzy.
How does the scheme set its technical parameters?
The board of directors sets the Scheme’s technical parameters (purchase value of a point, service value of a point, premium factor, lump sum conversion factor for spouses and lump sum conversion factor for orphans).
These parameters change based on the life expectancy of generations who are at retirement age and on the revaluation of the amounts they have paid as contributors.
Pension reform law n° 2003-775 of 21 augustt 2003 instituting the French public service additional pension scheme
Creation of the French public service additional pension scheme
Start of scheme operations (1 January) - Decision to invest all funds according to SRI approach
First rights granted - Adoption os SRI charter
First asset diversification - Adoption of benchmark SRI criteria
Payment of first annuities
Right to invest in real estate and forests
Adoption of guidelines for shareolder engagement
Dedicated vehicles for French equities, US equities and real estate
Implementation of a dedicated US dollar-denominated corporate bond fund
Changes to ERAFP’s investment rules
Investment in the NovESS social and solidarity economy fund
Participation in the launch of the first French green bond
Launch of an emerging country corporate bond call for tenders
ERAFP signs the Tobacco-Free Finance Pledge and completes its withdrawal from the tobacco industry
ERAFP accelerates its withdrawal from coal
ERAFP joins the Net-Zero Asset Owner Alliance
ERAFP adopts objectives for 2025, in line with its target of making its investment portfolio carbon neutral by 2050.