Austrian fund fusion creates ATS21bn giant
AUSTRIA - The Vienna based ATS3.8bn (e280m) Verbund Pensionskasse, the pension scheme for Austria’s largest electricity company, has announced that it is to merge with the ATS 17bn (e1.3bn) OEPAG Pensionskassen, one of the country’s seven open funds, in an effort to cut costs and concentrate on its core business.
Franz Paulus, a board member of the Verbund Pensionskasse, which has around 3,400 members, says the combined operations will now represent some 65,000 members and bring total assets to around ATS21bn – a fifth of the ATS110bn in the country’s combined open funds.
Paulus comments: “The merger means that we can now outsource all the administration to a company that has been doing it for years.”
He adds that the merger still requires the full permission of the Austrian authorities before it can go ahead and believes that this will take three to four months to go through.
Earlier this year, Paulus explained 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.”
There are currently seven open funds and eleven company owned pension funds in Austria, and observers believe there will be little if any growth in company sponsored plans in the future.