The organization is reportedly working on creating a fund that would purchase the real estate of retirees on a life annuity basis to help them increase their pensions.

Henri Emmanuelli, chairman of the supervisory board of the Caisse des Dépôts (French public sector financial institution) and also a Socialist Party (PS) member of parliament for the Landes region, confirmed this morning on RTL radio that the Caisse des Dépôts could soon create a fund to finance the purchase of life annuities of real estate belonging to retirees. The objective, revealed by the Journal du Dimanche this summer, is to allow low-income seniors who own their homes to receive a regular income to supplement their earnings. "We realize that the French actually have their own pension fund, but we don't call it that: we call it real estate capital," explains Henri Emmanuelli.

In a context of an aging population – the number of people over 60 is expected to increase by 8 million by 2040 according to INSEE (the French National Institute of Statistics and Economic Studies) – and uncertainty surrounding pension levels, the idea could appeal to at least some of the 70% of septuagenarians who own their homes. This is especially true since, according to notaries, they are already showing interest, as evidenced by the numerous pending sales listings on real estate agency websites. Buyers are becoming increasingly scarce. Between 3,500 and 5,000 life annuity sales are finalized each year, a negligible number compared to the approximately 700,000 real estate transactions carried out annually. Beyond the "bet on death" aspect, which buyers consider rather unhealthy, the increase in life expectancy makes the risk too great for such a significant purchase. Hence the idea of ​​reducing the risk to make the formula attractive again.

According to a source close to the matter, the Caisse des Dépôts (CDC) is considering implementing a "mediated life annuity" mechanism, meaning a system where the buyer is no longer an individual who could potentially become insolvent, but institutional investors subscribing to a fund. This would reassure sellers regarding the payment of their annuity. According to the Journal du Dimanche , the insurer CNP, a subsidiary of the CDC, is among those involved in the discussions. As for the risk of the owner living longer than expected, it would be pooled because the fund would acquire several hundred properties. If approved, this system could be implemented as early as 2014. The fund could be endowed with approximately €100 million.

Source: Le Figaro