The Vienna based e280m Verbund Pensionskasse, the pension scheme for Austria’s largest electricity company, is seeking a merger with one of the country’s seven open funds in an effort to cut costs and concentrate on its core business.

The fund, which earlier this year put its administration and investment management out to tender, says its has now postponed the RFPs until any merger agreement has been reached.

Franz Paulus, a board member of the Verbund Pensionskasse, which has around 3,400 members, comments: “ Now we will probably go in the direction of making a merger with an Austrian non-company owned pension fund.”

He notes that there are seven such open funds in Austria, but says there has yet to be a decision on which fund the Verbund PK will join.
The fund is currently in the process of talking to the open funds and hopes to have a decision by September.
Paulus explains the cost rationale behind such a fusion: “ We want to concentrate on our core business because there are no human resources for all these products in the pension fund and so on.
“ At the moment we are focused on the merger. Maybe after this we will look for new asset managers. It makes no sense to do this before.”

Paulus adds that there are seven open funds and eleven company owned pension funds in Austria, but believes there will be little if any growth in company sponsored plans:
“ I don’t think there are any more companies in Austria that are in the market for company owned pension funds.”