AUSTRIA - Austrian insurers see "no need for a pension reform" if all assets from Pensionskassen are shifted to insurance-based occupational pension vehicles.

The association of Austrian insurers (VVO) issued a press release on the so-called Betriebliche Kollektivversicherung (BKV) - or the Company Collective Insurance Scheme - which has been struggling to gain a significant market share in the occupational pensions market since its inception in 2005.

Currently, the BKV manages around €450m in assets, while Pensionskassen manage close to €15bn.

The VVO said: "The BKV is an occupational pension scheme with guarantees and thus renders a reform of the Pensionskassen system obsolete as it already offers a safe alternative."

Since the financial crisis, politicians and industry representatives have discussed a reform of the pension system, including guarantees, as some members of Pensionskassen, which mostly offer pure defined contribution schemes, suffered severe cuts to their pension benefits.

The VVO has said that, "in times of volatile stock markets", the insurance-based pension plans are "the only guaranteed method to see employee benefits increase", as the BVK is less correlated to market movements.

However, critics said this "increase" would only be minor, as the guarantees interest rate on insurance-based schemes had been cut to 2% by the FMA from April this year from 2.25% last year.

The VVO's statement comes at a time when Pensionskassen, which saw their public image deteriorate further during the financial crisis, had to explain a negative performance in the first quarter

Further, the €142m Pensionskasse of the Austrian Chamber of Commerce (WKO) has allegedly lost several million euro in an investment in R-Quadrat, a real estate company that declared insolvency this spring.

No exact figure for the loss has been given, and, so far, there has been no official confirmation for the loss, but several politicians have called for a parliamentary commission to look into the investments, which also affect the Chamber of Commerce's own equity.

Meanwhile, a survey commissioned by the Austrian Erste Bank Group showed that 64% of Austrians are unaware of the term 'pension gap' or what it might mean for their future state pension. 

One-third of the 1,000 surveyed Austrians between 15 and 60 years of age overestimated the pension they would receive from the state.

While people expect the pension on retirement to be around €400-800 lower than their final salary, experts calculated a drop of between €800 and €1,000 for employees that are now between 30 and 45 years old.