AUSTRIA - The second-largest Austrian Pensionskasse, ÖPAG, will outperform the market average this year, according to Andreas Zakostelsky, head of the Vorsorge Holding.
Zakostelsky today revealed, at a briefing on the future of the Austrian pension system, that ÖPAG's year-to-date return stood at 9.15% by the end of the third quarter this year, topping the then market average of 7%. (See earlier IPE story: Austrian pension funds report 7% return)
"In the meantime, performance has improved even more," claimed Zakostelsky - who is chair of ÖPAG's parent group ‘Vorsorge Holding' - albeit maintaining a cautious estimate for 2009 of being "at the 9%-end" of a possible 7-9% market return this year.
The pensions group increased assets under management by just over €100m over the year to €3bn by the end of September 2009, and this level is expected to increase by another €250m in January 2010 when Unilever joins the Pensionskasse. (See earlier IPE story: Unilever joins Austrian ÖPAG)
Zakostelsky argued the current 20% participation rate of the workforce in the second pillar pensions regime would have to increase fourfold over the next 5-10 years to ensure a sustainable pension system without endangering the state's budgetary stability.
He urged the government to prolong tax incentives for outsourcing pension provision from the balance sheets beyond the current deadline of December 2010 argued for individual choice in the asset allocation of a Pensionskasse or when switching providers.
When asked whether more choice for members would lead to higher administration burdens and costs for Pensionskassen, Zakostelsky said each fund would have to ensure it has the right IT system in place to cope with the additional workload.
Zakostelsky also welcomed Austrian pension reform proposals to introduce an independently-established minimum level of buffer funds, in order to take this measure out of funds' competitive struggle for members.
The chairman of the Vorsorge Holding, founded last year by the ÖPAG "parents" banking group Raiffeisen and insurer Uniqa, described calls to allow people to take out money out of their Pensionskassen at any time as "absurd" and "an economical folly".