AUSTRIA – Austrian pension fund assets rose by 7.7% in 2003, rising to 97 billion euros from 90 billion euros, according to the Austrian Investment Association.

The 23-member VOIC, or Vereinigung Osterreichischer Investmentgesellschaften, made the comments in a report entitled “Light at the End of the Tunnel” .

“Altogether the Austrian funds could book a profit on the scale of 5.4%,” said VOIC.

Economic developments had triggered “cautious optimism” and prompted hopes of positive development of the fixed assets said Christian Boehm, of Fachverbands der Pensionskassen, the country’s pension fund association.

The 20-strong association includes the IBM, Philips, Porsche and Siemens pension funds.

Boehm said: “The good results of 2003 bring a stabilisation of returns for the pension funds” and added that there were plans for a higher standard of transparency.

“Austrian pension funds reported a strong demand for occupational pensions last year,” he said.

Money market funds’ share of portfolios were 6.8% at the end of December, up from 4.3% a year before.

The International Monetary Fund said in November that Austria’s recent pension reform would boost the country’s long-term fiscal sustainability.

In 2003 the Austrian government embarked in a series of major changes to the Allgemeines Sozialversicherungsgetz, the largest public scheme which covers around 75% of workers.

The changes saw early retirement being phased out during 2004-17 by a raising of the early retirement age to 65, a reduced accrual rate and a higher bonus for late retirement.