1254-NEW CDC V° GB · Further increase in loan disbursements to build up the inventory of...

14Banking activities

29The regionalofficenetwork

30Administrative mandates for public-sector retirement funds

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18The administration and transformation of public savings

24Local and regional development

Long-term administrationin the service of the nation

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Caisse des Dépôts provides safe and ethical administration of funds requiring special protection. A trusted administrator, the services it provides combine the most stringent banking standards with the specific needs of the customer to provide an irreproachable quality of service. In addition to its mission as public bank to the judicial system, Caisse des Dépôts is also a banking partner for public- interest bodies and an administrator of public programs.

A bank specializing in public-interest missions

In 2004, the Banking Division collected €48.8 billion in cash deposits and managed €14.4 billion in securities. It is responsible for the due and proper administration of the third-party funds held by the regulated legal professions and for administering escrow deposits. The Division, which is organized around the principles of quality management and customer partnerships, offers a range of banking products and services tailored to the needs of public-interest bodies, while providing its customers with a high level of security.To serve its 49,000 customers, the Banking Division works with the general and tax collection agencies of the French treasury department (Trésor Public) network, as well as with the Paris branches located at the Caisse des Dépôts head office. Specialized customer service teams at the regional headquarters actively promote Caisse des Dépôts services.

Nearly 400 people in the Paris offices are responsible for customer contact (branches), banking services, and developing and managing all banking applications and services.A full range of online banking services, CDC-Net, tai-lored to the needs of professionals and integrated into their IT systems, enables customers to manage their transactions in real time just as their customer rep-resentatives do.

Public-interest banking and missions

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Change in average cash deposits (€ millions)

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Change in securities deposits(€ millions)

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Caisse des Dépôts - Annual Report 2004

Consolidating the role of publicbanker to the judicial system

Funds deposited in escrow have been increasing stead-ily over the past several years, and in 2004 they grew 7.9% to €2.73 billion. Caisse des Dépôts is continuing to modernize its escrow deposit administration, prompt-ing the implementation of a customer-focused structure and the reorganization of the administration system. This modernization drive is supported by increased pro-motional efforts regarding business prescribers.Notary deposits continue to grow, reaching €18 billion, thanks to the relentless increase in real estate prices. Deposits from court-appointed receivers and agents (AJMJ) rose 2.2% in 2004 to €7.8 billion. Caisse des Dépôts also offers a full range of professional banking services for bailiffs and clerks of commercial, small claims and civil courts.In order to accelerate the modernization of the legal pro-fessions, the Banking Division develops and maintains partnerships within its profession, especially in the areas of new technologies, training and quality. Caisse des Dépôts also helps disseminate continental European law by assisting the legal professions with their cooperative actions and by taking part in the initiatives organized by the Ministry of Justice to promote and support this body of law. Thus, in 2004, Caisse des Dépôts helped pre-pare a response to the World Bank’s “Doing business” report, which questioned the French legal system.

Financial assistance for the Frenchsocial security system

Caisse des Dépôts is the banker to the central body for France’s social security system (ACOSS), which centralizes the cash holdings of the four service agencies (sickness, workplace injuries, family services and pensions) and the collections branch, comprising 105 URSSAF centers.

Long-term administration in the service of the nation _ BANKING ACTIVITIES

TECHNOLOGY PARTNERSHIPS

Caisse des Dépôts assists the legal professions with their technology projects, thus contributing to the modernization of the judicial system. Examples include:– a major collective project, launched in 2004, between the governing body of notaries, the French tax administration and Caisse des Dépôts, which promotes electronic financial transfers among notaries and paperless (EDI) mortgage documentation. The initiative is part of the more comprehensive “Télé@ctes” project to promote electronic exchanges of administrative information between these two partners;– Caisse des Dépôts lends its support to the governing body of court-appointed receivers and agents to set in place an economic observatory of distressed companies;– Caisse des Dépôts supports the move toward EDI for bailiffs and their instructing parties, a priority for the bailiffs’ governing body, notably by enabling them to exchange financial information electronically.

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Caisse des Dépôts helps optimize the social security sys-tem’s cash management by providing real-time consoli-dation and reporting of its cash inflows and outflows. It thus provides a high added-value account management service, guaranteeing the liquidity of the system and the correct payment of benefits and services, framed by a continuous monitoring of its quality and adaptation to the changing needs of ACOSS. The year was marked by a highly unusual cash require-ment on the part of the social security system, which led Caisse des Dépôts to grant a €25 billion facility to ACOSS. The intervention of the fund for the amortization of public debt (CADES), effective September 1, 2004, enabled ACOSS to absorb this financing requirement and finish the year with a cash surplus.Caisse des Dépôts also provides payment of benefits to people insured by many public health insurance and family services agencies.

CDC-NET

The CDC-Net online banking service continues to record increases in the number of users and connections, which were up 44% over 2003, and is now an everyday tool for the majority of Caisse des Dépôts customers. Users surveyed expressed a high and increasing degree of satisfaction with both the user-friendliness of the application itself and the extent of its functions, which are regularly expanded to meet customers’ specific needs.

CDC-Net: number of customer subscribers

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Providing full-service banking to public-interest bodies

The historical banker for public/private companies and public housing corporations, Caisse des Dépôts also works with foundations, national public service asso-ciations and PublicInstitutions. It provides both trans-parency and security to these longstanding customers.The year was especially marked by the level of depos-its by the French retirement reserve fund (FRR), which maintained average balances of €14.6 billion in a time deposit pending the operational start-up of its invest-ment mandates.

Developing administration of public mandates

The French government, independent administrative authorities and local governments all rely on Caisse des Dépôts for the administrative and financial man-agement of national public funds or those granted by the European Commission under specific initiatives and programs. More new fund administration mandates were entrusted to the Banking Division in 2004:■ the fund for the financing of impecunious cases, responsible for providing compensatory payments to court-appointed agents appointed as liquidator or creditors’ representative in a class action and unable to obtain a minimum level of compensation;■ a foundation intended to distribute amounts due to families of the victims of the UTA DC-10 disaster;■ coordination of four European research consortiums appointed by the 6th technological research and devel-opment framework program;■ financial management of a global grant and three transnational projects funded by EU Structural Funds. ■

Long-term administration in the service of the nation _ BANKING ACTIVITIES

GREENHOUSE GASES

By a decree dated December 28, 2004, Caisse des Dépôts was named responsible for administration of the national green-house gas (GHG) emissions quota register. Caisse des Dépôts has developed an online accounting application called Seringas for recording quota allocations and transactions, providing an audit trail and valuations in a safe and secure system.Other European countries – namely Germany, Spain, Belgium, Portugal, the Czech Republic and Slovakia – have also selected Seringas for the administration of their own national registers. These relationships are developing in the spirit of mutual cooperation, and Caisse des Dépôts will act as secretary of a new users’ club established to study all necessary modifications and adaptations.In France, 151 million quotas will be allocated to 1,200 GHG emitting facilities. Caisse des Dépôts has organized training sessions for French companies to promote use of the application under the best conditions possible as soon as it is put into service.

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ACOSS balance with Caisse des Dépôts (€ billions)

Caisse des Dépôts - Annual Report 2004 17

Caisse des Dépôts administers a significant portion of tax-exempt passbook savings deposits. It uses these deposits to provide long-term loans, mainly for low-income housing and urban development. 2004 was marked by change and expansion, in particular through the establishment of new loan packages: €2 billion in subsidized loans to renovate 100,000 additional housing units over five years, and €4 billion to co-finance transportation infrastructure.

Resources: regulated savings deposits

Increase in overall deposit volume. In an environ-ment of low interest rates and plentiful savings, the over-all deposit volume centralized by the Savings Funds Division (including accrued interest) rose by 3.5% to €225 billion in 2004. This increase was made possible by net inflows from depositors and through capitalized interest. Only the PEP CNE (Caisse Nationale d’Epar-gne) deposits contracted, with nearly 10% net outflows on deposits. The approximately €1.3 billion outflow on the livret A passbook deposits was more than offset by capitalized interest. Among the most dynamic passbook deposits, the livret d’épargne populaire (LEP) benefits from an espe-cially attractive interest rate offered to depositors, even after its decrease from 4.25% to 3.25%. The Codevi and livret Bleu deposits offered by Crédit Mutuel, which pay the same interest rate as the livret A, recorded net inflows.

Net inflows on the CNE home-purchase savings plans slowed. Since end-2003, new home-purchase policies limit the benefit of the State subsidy to those house-holds that will exercise their right to a loan. Conversely, the home-purchase deposits recorded a net increase in inflows of nearly 10%. Overall, the savings funds saw net inflows of more than €7 billion. Centralized deposits total nearly €225 billion. This growth is in line with that of the previous five years.

The administration and transformation of public savings

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Inflows and outflows of savings funds centralized by Caisse des Dépôts (excluding interest) (€ billions)

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Lower commissions paid to the networks. At end-2004, the government announced a 0.10% cut in commissions paid to the livret A and livret Bleu col-lection networks. The Nasse-Noyer report, published in January 2003, underscored the need to review network commission rates, which — given that they average more than 1.2% on all relevant deposits — represent a significant cost for the savings funds, as well as for borrowers looking for low-income housing loans, since the interest rates they pay depend on the cost of resources to the savings funds.

Uses

Housing and urban development loans

The impact of the renewal of public policies on growth in loan volume from the savings deposits remained limited in 2004. In 2004, savings fund loans for housing and urban development remained essen-tially unchanged from the previous year at €4.2 billion, a 0.2% increase. Transportation infrastructure loans were included for the first time. Loan disbursements

targeting low-income rental housing continued their upward trend of 2003 to reach €3.2 billion in 2004, a 1.1% increase.

Further increase in loan disbursements to build up the inventory of low-income housing. Loan disburse-ments by Caisse des Dépôts to increase the inventory of low-income housing (construction and acquisition, with or without works) increased by 1.4% in 2004 to reach €2.72 billion. This further increase extends the trend that first began two years ago. In 2004, the growth was attributable to:■ the robust 19% increase in disbursements of urban renewal loans (PRU) favoring renovations as part of urban renewal projects;

Long-term administration in the service of the nation _ THE ADMINISTRATION AND TRANSFORMATION OF PUBLIC SAVINGS

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Relative share of products within centralized savings funds (%)

(1) For 2004: provisional amounts subject to adjustment. (2) Livret B (CNCE). (3) Livret Bleu: gradual centralization of deposits from 1991 through 1999. (4) Livret Jeunes: created in May 2, 1996.

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004(1)

Livrets A et B (2) 76.3 67.3 64.0 60.7 55.7 54.7 54.6 54.2 52.8 51.8

LEP 9.1 14.8 16.3 17.9 19.8 20.9 21.2 21.2 22.0 22.6

Livret Bleu (3) 3.5 3.5 4.6 5.6 7.8 7.5 6.9 7.0 6.9 7.1

Codevi 3.7 4.3 4.0 4.0 3.7 3.3 3.5 3.7 3.8 3.9

Epargne-logement 6.6 8.8 9.7 10.5 11.7 12.3 12.7 13.0 13.5 13.7

Livret Jeunes (4) 0.0 0.4 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5

PEP 0.9 0.9 1.0 0.9 0.8 0.7 0.6 0.5 0.5 0.5

Total 100 100 100 100 100 100 100 100 100 100


ESTABLISHING A SUBSIDIZED “RENOVATION” LOAN PACKAGE

In 2004, Caisse des Dépôts decided to create an exceptional €2 billion loan package over five years to renovate the existing inventory of low-income housing and thereby bring an additional 100,000 low-income rental housing units up to current standards.This loan package, subsidized by Caisse des Dépôts as part of its public-interest mission, is offered at a 2.95% adjustable rate, compared with a benchmark rate of 3.45%.

ESTABLISHMENT OF ADJUSTABLE-TERM LOANS AND INFLATION- INDEXED LOANS

In 2004, Caisse des Dépôts developed two new products aimed at the financing of low-income housing and special-needs accommodation: adjustable-term loans indexed on the livret A and loans indexed on the consumer price index. Adjustable-term loans enable borrowers to neutralize or limit changes in the livret A index on their loan repayments.Inflation-indexed loans enable borrowers to benefit from a new index that favors a good fit between changes in their resources (mainly rents) and their interest expense.

■ a further 25% increase in disbursements to €266 million of low-income rental housing loans (PLS), fol-lowing a two-fold increase in the annual loan package, granted by the government in the year in response to the strong demand from developers for this speci-fic product. This type of loan qualifies for inclusion in the calculation of the minimum quota of low-income housing required under the Urban Solidarity and Renewal (SRU) law, and remains a viable option despite the increase in property values in most urban areas;■ a 1% increase in loan disbursements for PLUS low-income rental housing loans. Although this increase was relatively modest, it continued the trend observed in 2003. These loans represent a core activity, with a total volume of €2.06 billion.

A decrease in loan disbursements for financing projects on behalf of the most economically disad-vantaged. Disbursements for assisted basic rental hou-sing loans (PLAI) contracted by 25% to €178 million in 2004. This decrease was nevertheless partially offset by the growth in the range of PLUS rental housing loans, which require that at least 30% of the housing units be reserved for the most economically disadvantaged households.

Volume of renovation loans remains stable. Dis-bursements of low-income housing renovation loans stabilized at around €500 million last year, which is only 0.5% less than in 2003.This activity is likely to grow overall in 2005 thanks to the exceptional interest subsidy implemented by Caisse des Dépôts on loans for bringing low-income housing (HLM) units up to current standards and the launch of the National Urban Renewal Agency (ANRU), which has now been completed.

A contraction in loans to finance middle-income housing. Disbursements of loans for middle-income rental housing (PLI) contracted by 53% to €27 mil-lion, partially as a result of the net decline in issues from the previous year but also because the interest rate was still considered too high, despite the decline in the rate paid on the livret d’épargne populaire (LEP) savings deposits used to finance these loans.

Volume of special-needs accommodation loans and low-income housing renovation loans remains stable. Caisse des Dépôts offers two products to

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meet special needs: the PHARE loan, which enables the financing of accommodation for those with special needs (elderly, handicapped and young adults), and the experimental loan (PEX), which was designed to finance housing and other specialized accommodation projects, as well as measures to bring existing private-sector facilities up to standard and to renovate the sup-ply of existing low-income housing. Disbursements of PHARE and PEX loans remained stable at €450 million. The bulk of these loans were used for assisted living facilities, notably for the handi-capped and the elderly. Loans to low-income housing and public/private companies totaled nearly €200 million. Of that total, €70 million went toward asset transfers between hous-ing organizations and also involved the acquisition of

private-sector housing, whereby rents and household incomes are within limits set by the so-called Besson agreement for existing housing inventory.

Stability in urban development loan disbursements. The National Urban Renewal Agency (ANRU), which has Caisse des Dépôts as a partner, was launched in 2004.Caisse des Dépôts thus found itself heavily involved with urban renovation projects conducted by ANRU, in par-ticular those using urban development loans (PRU). It also continued its lending activities in all urban policy areas. With more than €480 million in disbursements in 2004, the volume of urban renewal loans increased by 2%, although it remained below the overall amount avail-

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SAVINGS FUND LOANS ON ANRU PROJECTS

As of December 31, 2004, approximately 120 urban renewal projects had been submitted to ANRU. Of that total, 70 were approved by the agency’s Commitments Committee.Caisse des Dépôts loans account for one-third of the overall financing of these projects, equivalent to €2.9 billion over the five-year period from 2004 to 2008. The bulk of these loans — €2.1 billion — consists of PRU loans.

SAVINGS FUND LOAN VOLUME: €80.8 BILLION FOR HOUSING AND URBAN DEVELOPMENT

As in the previous four years, the volume of housing and urban development loans recorded steady growth in 2004, rising from €79.3 billion to €80.8 billion. This growth resulted from the combined effect of new loan issues and a limited volume of early repayments. Indeed, the proportion of early repayments was kept to less than 0.8% of housing loans. Given the strong demand from borrowers, a significant number of loan restructurings were completed in 2004. Loans restructured totaled €1 billion, around 1.3% of all urban development loans.

able for the year. Because ANRU was effectively set up only during the course of the year, the use of such long-term financing at favorable rates (2.50%) was delayed.Disbursements on urban development project loans, which target non-housing transactions, totaled €260 million, or 4% less than the 2003 total. Furthermore, issues were up significantly, given the lower interest rate applicable to these loans since August 1, 2004.Overall, the use of urban renewal and development loans stabilized at around €740 million last year, which was comparable to the 2003 figure. Two-thirds of these loans were issued in priority areas for urban development.

Savings fund loans other than urban housing

A record year for home-purchase loans. Home-pur-chase and complementary home-purchase loans, dis-tributed by La Poste and carried on the savings funds’ balance sheets, benefited from an especially dynamic real estate market and low interest rates. Disburse-ments approximated a record €4.5 billion for the year. In fact, despite the higher level of early repayments (nearly €1 billion), the total outstanding volume of these loans reached €17.2 billion, a more than two-fold increase over five years.

Loan disbursement trends (€ billions)

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Codevi deposits, which are centralized by Caisse des Dépôts, are used mainly to refinance the BDPME, a specialized entity lending to small businesses which does not have direct access to these deposits. In January 2004, Caisse des Dépôts granted a loan of €175 million, which increased the total outstanding volume of these loans to CEPME-BDPME to around €3.4 billion. PLI-PLS refinancing loans. As of December 31, 2004, 64% of total PLS volume (€670 million at 3.55% or 3.75%) in 2003 had been refinanced with Caisse des Dépôts.Approximately €20 million of the PLI program had been drawn. Financial institutions initiated few new requests for financing in 2004, given the continuing high interest rate (3.95%) on these funds compared to market rates.

Financial assets

With loan volume stable, the growth in deposit volume was reflected entirely in the financial asset portfolios, whose book value reached €126 billion, or more than half of total assets.Given the nature of the liabilities, 95% of which are regulated deposits (i.e. following application of the indexing formula for the livret A passbook savings, at rates based half on inflation and half on Euribor), the savings funds have aimed for a higher proportion of financial assets invested in inflation-indexed securi-ties, which accordingly increased from 2% to 4.2%. Meanwhile, the sensitivity of the fixed income port-folio was reduced, and now stands at 2.4 for the port-folios in aggregate, compared with 2.8 at end-2003. The decrease in market rates, notably at the end of the year, almost completely eliminated any unreal-ized capital losses, which totaled only €70 million at end-2003.Continuing the trend of previous years, the savings funds invested €400 million in equities of leading French and European companies in 2004, while divesting small-cap holdings. This strategy generated €400 million in capital gains. The equities portfolio gained 8.83%, or 0.90% more than the composite benchmark index (70% CAC plus 30% STOXX 200). Provisions were reduced by €265 million, to around

€750 million.

THE HOME-PURCHASE AGREEMENT: A NEW RELATIONSHIP BETWEEN THE SAVINGS FUNDS AND LA POSTE

Acting in the spirit of the Nasse-Noyer report, Caisse des Dépôts signed an agreement with La Poste that took effect on January 1, 2004 for the administration of home-purchase savings deposits centralized by Caisse Nationale d’Epargne (CNE). This agreement gives La Poste responsibility for managing the financial administration of all CNE home-purchase savings deposits centralized by Caisse des Dépôts, as well as related loans and financial assets. Instead of paying La Poste commissions based on loan volume and deposits under the old system, Caisse des Dépôts compensates La Poste with an amount that is equivalent to overall net interest income. This measure prepares the transition toward the postal financial institution that will assume responsibility for the administration of all savings deposits centralized by CNE (with the exception of the livret A) once the draft legislation involving the regulation of postal activities is adopted into law.

Net income

Despite the low level of net interest income (around €200 million after payment of commissions, or less than 0.10% of total assets), the savings funds generated €1.27 billion in net income thanks mainly to capital gains, reversals of impairment provisions against finan-cial assets, the reduced risk on low-income housing loan portfolios and the impact of reduced commissions paid to collection networks. ■

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Local and regional development

Caisse des Dépôts is a long-term investor in sectors that assist local governments with their development policies. It provides equity financing in real estate, housing and urban development, digital infrastructure,

environmental protection, tourism, health care and social work. The Local and Regional Development Division, which focuses on this activity, relies on a network of 25 regional offices.

Achatpublic.com online purchasing

Achatpublic.com, created in March 2003, won the ten-der offer to manage purchasing on behalf of the French government (defense purchasing excluded) and interes-ted local governments. Created by the Union des Grou-pements d’Achats Publics (UGAP), the Achatpublic.com platform has captured nearly 50% of the overall market.

Citizens’ Internet

Local Public Service (SPL) is now offered by all the French government’s préfectures and 550 municipal-ities. The number of citizens potentially served amounts to nearly 50% of the country’s overall population.

FAST (secure Internet transaction provider)

Based on the favorable results of the experimental online control of legality in twelve municipalities of the Yvelines département (9,000 documents trans-ferred electronically through FAST), the Ministry of the Interior decided to extend this experimentation to three other départements (Val-d’Oise, Rhône and Alpes- Maritimes). The test for putting civil status materials online is also under way in Deux-Sèvres, with the Caisse Primaire d’Assurance Maladie, Mutualité Sociale Agricole and the Caisse d’Allocations Familiales.

Promoting online use

The Cyberbase program

The Cyberbase program is fulfilling expectations. With an initial objective of 400 in four years, 210 access points have been opened so far and another 100 are expected to open in 2005 and again in 2006. The new Cyberbase.org portal has been up and running since the summer of 2004 and is linked to other public-service databases outside the Cyberbase network. Each day, it is used by nearly 430 service providers.

Long-term administration in the service of the nation _ LOCAL AND REGIONAL DEVELOPMENT

Local and regional digitaldevelopment

Investments in telecommunicationsnetwork projects

In 2004, digital projects by local governments were designated as “Services of General Economic Interest” by the European Union, and the French Legislature adopted the legal framework that enables local govern-ments to become network operators in France. As a result, the pace of local government projects has quickened. Some 52 public-service tender offers for local and regional governments to be equipped with digital technology are under way and being reviewed by Caisse des Dépôts. Twenty of these tender offers have already been awarded. In the years ahead, these projects represent potential investments of €808 million, including €64 million for Caisse des Dépôts. Continuing its initiative since 2000, Caisse des Dépôts formalized its partnerships with private-sector compa-nies (operators, equipment suppliers, civil engineering specialists).

Investments in Internet services

2004 was the year in which the French government made a firm commitment to developing online admin-istrative services, which solidified the role of Caisse des Dépôts in this area through the partnership already begun with Documentation Française and the agency responsible for the development of online administra-tive services, ADAE. In the ADELE plan (online adminis-trative services), which was announced at the begin-ning of the year by the Prime Minister, eight measures directly involve Caisse des Dépôts.

25Caisse des Dépôts - Annual Report 2004

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Electronic schoolbag project

Since 2003, Caisse des Dépôts and France’s National Education system have conducted a joint program to disseminate an electronic schoolbag throughout the country. In 2004, six of the sixteen projects currently in the test phase were rolled out. Today, 100,000 digital work areas are open and are used by students, parents and teachers.

Partnerships and local services

Caisse des Dépôts’s activities in this area involve very small businesses, the not-for-profit sector and support for small local governments.

THE SOCIAL COHESION FUND: €73 MILLION OVER FIVE YEARS

On November 26, 2004, Caisse des Dépôts signed a three-year framework agreement with the Ministry of Employment, Labor and Social Cohesion and with the Ministry of the Economy, Finance and Industry involving support for the Social Cohesion Plan. In that context, and to enable people in difficult financial situations to continue to have access to banking services, the State has entrusted Caisse des Dépôts with the administration of the Social Cohesion Fund, backed by €73 million in budget credits over five years.

Long-term administration in the service of the nation _ LOCAL AND REGIONAL DEVELOPMENT

guarantees was granted to the organizations through Sogama, an association supported by Caisse des Dépôts. Moreover, Sogama-Crédit Associatif, a guar-antee company in which Caisse des Dépôts is a sha-reholder, strengthened its position as a capital markets resource by selling equity stakes to several banks.

Support for local and regional associations

2004 was marked by the renewal of most agreements with the major local and regional associations: the Asso-ciation des Régions de France, the Association des Communautés de France, the Association des Dépar-tements de France and the Association des Maires de France.The cooperation with the network of development agencies and growth commissions (CNER) led to a joint proposal for the implementation of regional economic development plans.In 2004, Caisse des Dépôts together with DATAR helped to move Entreprises, Territoires et Développe-ment (ETD) toward greater assumption of responsibil-ity by the local and regional governments.The partnership with the Mission Opérationnelle Trans-frontalière (MOT) took shape with the creation of the European District, the precursor of a future European mechanism for cross-border projects, within the context of the Local Responsibilities and Liberties law.

Mairie-Conseils: support services for elected representatives

For the past sixteen years, elected representatives from more than 14,000 rural villages and 1,400 village asso-ciations have used the telephone call center established by Mairie-Conseils, a department of Caisse des Dépôts. In 2004, Mairie-Conseils answered nearly 10,000 ques-tions from elected representatives on all types of muni-cipal and inter-municipal matters. To support their inter-municipal development, Mairie-Conseils met the elected representatives of 128 inter-municipal organizations in 2004.

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Very small businesses: Caisse des Dépôtsplays a central role in national and regional policies designed to help company start-ups and transfers

In support of regional economic development poli-cies, Caisse des Dépôts offers to develop jointly with regional executive bodies measures to assist with company start-ups and transfers.Thus Caisse des Dépôts supports the development of interest-free loan associations. The growth of their activ-ities, which is estimated at 20% for 2004, is significantly higher than the increase in the number of company start-ups in France. To ensure that these associations provide quality service to business founders, Caisse des Dépôts provides their leaders with the tools to enhance their professionalism and skills.

Tax-free urban zones: a targeted program

In 2004, Caisse des Dépôts launched its economic development program for the tax-free urban zones and neighborhood renovation zones, consistent with the responsibilities assigned to it by the French government under urban renewal legislation. The resources provided made it possible in particular to launch a professional training initiative for the 85 peo-ple in charge of these tax-free zones, and to create a partnership that will soon make it possible to provide €10 million in participatory loans for start-up companies.

Socially-oriented economic development:consolidation of not-for-profit organizationsinvolved in job creation

The activities of Caisse des Dépôts in this field focused on two main areas:■ the establishment, together with the State, the European Social Fund and local governments, of a decentralized support network. This network provides professional support to not-for-profit organizations (development of an interim business plan, marketing, human resources, management, etc.). In 2004, some 4,000 such organizations benefited from this service;■ the continued growing popularity of financial appli-cations. The France-Active network, supported by Caisse des Dépôts through its guarantee and private equity contributions, financed 738 projects represen-ting 6,700 new jobs. In addition, €14.8 million in

The development of real estate investments and equity interests,and supporting urban renewalpolicies

The development of real estate investments

As part of its long-term investing activity, Caisse des Dépôts invested €121 million in 2004, mostly jointly with private-sector companies, participating in down-town revitalization projects and major local and regional projects in support of local policies. These investments involved mainly the following trans-actions:– middle-income housing;– office space;– tourism and urban leisure activities;– commercial centers;– health care and social-work projects.

Public/private companies and local investment companies

In 2004, Caisse des Dépôts continued its activities on behalf of public/private companies (SEMs) and local investment companies by contributing to the imple-mentation of major projects as part of local and regional economic development policies. To that end, it invested nearly €10 million in the form of equity interests in new companies and subsidiaries of existing companies last year. In addition, it participated in the financial restruc-turing of companies in the development phase.

Support for urban renewal policies

Caisse des Dépôts’ support for urban renewal policies is based on the agreement signed on May 24, 2004 with the Ministry of the Economy, Finance and Industry and the Ministry of Employment, Labor and Social Cohe-sion, and through its position on the Board of Direc-tors of the National Urban Renewal Agency (ANRU). This agreement, under which Caisse des Dépôts is providing a loan package of €550 million for the period 2003-2008, picked up where the Urban Renewal Fund (FRU) left off. Caisse des Dépôts thus made the exper-tise of its network available to the ANRU by helping out with the local review of more than 100 applications presented by local governments and their approval by the Agency’s national units. Last year, the ANRU Commitments Committee approved 70 loan offers that will create a commitment by Caisse des Dépôts of €18 million in engineering loans and €2.9 billion in savings fund loans over five years. As a result of all these projects, 34,000 housing units will be demolished, 31,000 low-income units rebuilt and 75,000 units reno-vated. Caisse des Dépôts also contributes €4 million toward the Agency’s operating budget.

The emergence of public/private partnerships (PPP)

As part of its support for the actions of public authori-ties, Caisse des Dépôts helped to create a new form in France of realizing, financing and managing public infrastructure, namely public/private partnerships (PPP). In 2004, it implemented the means for participating as a long-term investor and participated in initial delibera-tions on several hospital (Caen, Sud-Francilien, Besan-çon, Rennes) and prison project consortiums. The first financial commitments will be made in 2005, notably for the creation of the Institut de la Vision (Quinze-Vingts national ophthalmologic hospital), whose tender offer was won by the consortium consisting of Caisse des Dépôts, Caisse d’Epargne Group and Icade. ■

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Long-term administration in the service of the nation _ THE REGIONAL OFFICE NETWORK

The Public Institution office network, made up of 25 regional offices (in mainland France and overseas depart-ments), has 600 regional employees. It implements public-interest missions throughout the country.

These public-interest missions are based on three core businesses:■ administrator of private-sector funds requiring special legal protection (regulated deposits, tax-free passbook savings deposits, public and semi-public retirement funds);

■ lender for the financing of low-income housing and public-interest investments in infrastructure projects;■ investor to support national and local public policies.In these three sectors, the regional office network reviews the files and serves as the local contact on operational matters with elected representatives, local companies and intermediaries and the legal professions.In this era of decentralization, when a “new local and regional economy” is emerging, Caisse des Dépôts, the historical partner of local governments, is an impartial player firmly committed to long-term development. ■

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The regional office network

Caisse des Dépôts regional office network


Administrative mandates for public- sector retirement funds

In order to fulfill its missions while dealing with the rising level of activity, the Retirement Administration Division upgraded its IT system, adopted best prac-tices for administrative and financial management in a secure environment and streamlined administrative procedures.Caisse des Dépôts provides technical and administra-tive management for basic, complementary and sup-plementary funds, as well as solidarity-based benefits. Currently it is the only administrator to implement the full range of vesting techniques. With its commitment to retirement savings, the Retire-ment Administration Division also steers the technical administration of the various retirement savings funds, with a goal of achieving the highest possible standards. It carries out prospective analyses of the funds’ long-term equilibrium and actuarial simulations and calcula-tions for the purpose of adapting fund parameters to relevant economic and demographic changes.

The main funds administered

■ Three major pay-as-you-go retirement savings funds for permanent civil servants and fixed-term public-sec-tor employees:– CNRACL, the basic retirement fund for permanent civil servants employed by local governments and public hospitals, with 1,824,000 contributing members and 761,000 retirees. A fund for the prevention of workplace injuries and work-related illnesses has been established within the basic fund;– IRCANTEC, the supplementary retirement fund for fixed-term contractual employees of France’s three public-sector functions (the State, local governments and hospitals) and local elected officials. This fund covers 2,500,000 contributing members and 1,565,500 retirees;– FSPOEIE, the special pension fund for permanent blue-collar workers of State-owned industrial establish-ments, with 57,000 contributing members and 108,000 retirees; ■ supplementary retirement funds for specific socio-professional categories: – pension fund for local elected officials (FONPEL);– assistance fund for elected officials completing their terms (FAEFM);– the supplementary retirement fund of the Compagnie Générale Maritime (CGM);

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Since its founding in 1816, Caisse des Dépôts has administered public-sector retirement funds. This responsibility is part of its primary mission, namely to ensure the financial security of French citizens and contribute to the development of savings and personal insurance. It currently administers 48 retirement savings funds, with 70,000 employers, covering nearly 7 million active workers and more than 2.6 million retirees, which is equivalent to one out of every five retirees. In 2004, the Retirement Administration Division received new administrative mandates from the civil servants’ supplementary retirement fund (RAFP) and the miners’ retirement savings fund (Retraite des Mines).

A leading administrator of public-sector retirement savings

Through its Retirement Administration Division, Caisse des Dépôts performs its administrative mandates in three areas:– numerous retirement savings funds, notably in the public sector; – indemnification of professional risk;– the administration of various compensation funds.Currently, Caisse des Dépôts has 48 administrative mandates, and is a privileged partner of local govern-ments. Caisse des Dépôts’ competencies include the various financing techniques for retirement savings plans, from pay-as-you-go plans to funded plans, rights administra-tion and plan management.

■ assistance funds for the elderly based on national

solidarity;

– special elderly assistance;

– supplementary assistance by the special elderly

assistance department (SASV) for certain categories

of very economically disadvantaged beneficiaries;

■ the national workplace injury and work-related illness

prevention fund;

■ national compensation funds between local govern-

ments and public-sector institutions;

■ disability funds;

■ finally, Caisse des Dépôts administers the FRR retire-

ment trust fund. In 2004, the fund began to invest in

the main asset classes, which resulted in the largest

international asset management tender offer of the year. Caisse des Dépôts had to mobilize significant resources to monitor the management of these assets, in particu-lar its back office departments.

Retirement savings fund reforms,RAFP and Retraite des Mines

2003 was a year of reform for the public-sector retirement savings funds, which required swift and con-certed action by the entire Retirement Administration Division. By January 1, 2004, the division was able to pay out the required amounts precisely and on time, and to fund automatically, the very high number of pensions involved.

Long-term administration in the service of the nation _ ADMINISTRATIVE MANDATES FOR PUBLIC-SECTOR RETIREMENT FUNDS

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Its legal departments participated in amending the laws affecting the CNRACL and FSPOEIE and in reviewing the impact on the IRCANTEC regulation.Meanwhile, Caisse des Dépôts also received new administrative mandates in 2004.The June 18, 2004 decree No. 2004-569 relative to the RAFP civil servants’ supplementary retirement fund entrusted Caisse des Dépôts with administrative responsibility for this new fund that covers more than 4.5 million civil servants at the State, local and regional government and public hospital levels.Less than five months later, the November 2, 2004 decree No. 2004-1172 completed the transfer of the elderly/disability assistance fund from the Caisse Auto-nome de la Sécurité Sociale dans les Mines (CANSSM) to the Public Institution. At end-2003, this fund had more than 380,000 retirees, nearly 17,000 active contributors and paid €1.9 billion in benefits.The addition of the RAFP and Retraite des Mines funds expands the scope of the Caisse des Dépôts retirement savings funds and poses several simultaneous chal-lenges. One of the most pressing challenges involves the financial administration of the RAFP reserves, which are expected to grow sharply over time. The miners’ retire-


ment savings fund also faces significant challenges, especially in three specific areas: human resources management, productivity gains and IT systems inte-gration. Caisse des Dépôts has taken on 300 addi-tional employees. A Paris office has been added to the existing Angers and Bordeaux offices.Through these two new administrative mandates, Caisse des Dépôts has further expanded its position as a major administrator of public-sector retirement savings in France.Meanwhile, the Retirement Administration Division must ensure it is in a position to meet the quantitative chal-lenges for its existing mandates posed by increased commitments related to demographic changes, longer benefit-payment periods and the growing number of workers reaching retirement age. From a quality stand-point, the division plays an especially important role in the implementation of information rights for the insured and the administration of vesting rights.

Performance, quality and responsibility

A high-performance information system capable of supportingdevelopment

In 2004, the Retirement Administration Division also ensured the efficiency of its information system, whose architecture meets the latest standards. This system enabled it to overcome the challenges posed by the sharp increase in the number of benefits to be pro-vided and the new administrative mandates received. A Retirement Savings Economic Interest Grouping com-prising Caisse des Dépôts and CNRACL was created to support the development and operation of this infor-mation system. The Retirement Administration Division also developed its range of online services provided to customers, employers, retirees and active workers. Currently, the division is working on the implementation of information rights for affiliates and the integration of the Retraite des Mines and RAFP IT systems.

Demographics (millions)

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Cash flows (€ billions)

2004 (thousands)

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2004 (€ billions)


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The contribution to the debate over retirementsavings

For more than ten years, Caisse des Dépôts has actively contributed to the debate on the future of retirement savings plans. In Bordeaux, it organizes a leading forum for all profes-sionals of the retirement savings world. The subjects are discussed in a monthly publication, Questions Retraite, and on the www.cdc.retraites.fr web site.A member of the International Social Security Asso-ciation (ISSA), the Retirement Administration Division observes, analyzes and draws conclusions from the manner in which leading developed countries deal with a potentially contentious issue. ■

Quality and sustainable development

The standardization of operating processes, imple-mentation of benchmarks and compliance with a good governance code are all part of the division’s socially responsible management. The renewal of the CNRACL and ATIACL pension fund mandates was completed in 2004, and the SASV and FSPOEIE received ISO 9001 version 2000 certification.The mandates for IRCANTEC, FONPEL and the retire-ment savings areas of the national employment agency, ANPE, were renewed and received quality certification. This certification pertains to the administration of retire-ment savings funds and support for the principals in the context of governance and sustainable development. It is valid until 2006. For IRCANTEC, the “inform and advise clients”, “fund”, “pay” and “grant benefits” areas are certified. For FONPEL, the certification covers the entire administrative process and savings fund development. As for the ANPE, the audit certified the entire administra-tive process of both retirement savings plans.For the Bordeaux office, the ISO 14001 certification attests to the quality of its environmental management policy.

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