Development of an investment policy for the Autonomous Retirement Fund for Civil Servants of Burkina Faso (CARFO)

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ACTUARIAL

CUSTOMER:

Autonomous Retirement Fund for Civil Servants of Burkina Faso (CARFO)

  • 2017-2018

BACKGROUND AND PROBLEM:

Created in 1986, the Autonomous Retirement Fund for Civil Servants (CARFO) is responsible for managing the retirement plan for civil servants, military, magistrates and local authorities; the occupational risk prevention and compensation regime; and any other regime that would come to be created by law.

As a social security institution, CARFO has always distinguished itself by the regularity of payments of benefits due to policyholders, and no cash flow difficulty, to date, has yet compromised the regularity of these payments. However, CARFO does not have an investment policy that would allow it to rationalize its orientations in this area. It is certain that if the funds are properly invested, the revenues generated will help to strengthen financial solvency and ensure the financial balance of the social security branches for many years to come.

Thus, the formulation of an investment policy, the purpose of these services, will be a key factor in the proper management of the institution’s resources. This should help consolidate the gains and seek better investment opportunities in the institution’s portfolio.

SERVICES PROVIDED:

Our mandate was to provide CARFO with an investment policy. This policy should enable CARFO to ensure sound financial management of its portfolio in a sustainable vision.

We have:

  • reviewed the regulatory framework for investments;
  • conducted a study of investment opportunities at the national and regional level;
  • defined short-, medium- and long-term investment areas;
  • defined the asset-liability management strategy;
  • defined the prudential mechanisms and standards for the management of the investment policy.

RESULTS OBTAINED:

Our services made it possible to:
  • Inventory and assess the overall CARFO portfolio
  • Define the regulatory framework for the placement of investment funds
  • Define short, medium and long-term investment areas at the national and sub-regional level
  • Identify investment opportunities and set up a dynamic monitoring system
  • Produce the institution’s investment policy and management tools
  • Develop the prudential mechanisms and standards for the management of the proposed policy
  • Amend the CARFO draft law

The results of this study enabled CARFO to have an investment policy for better management of its assets.

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