AUSTRIA - The average 2006 return for Austrian pension funds will be around 5%, according to Markus Zeilinger, chief executive officer at Bonus Pensionskassen.

This would mean average returns would have more than halved compared to the 11.4% in 2005.

But Zeilinger told the Austrian Press Agency that even 5% "is a very good result for pension funds in a difficult year like 2006 considering that bonds - deemed to be ‘safe' - performed negatively because of rising interest rates."

The 5% would be at the top end of a return estimate of 3% - 5% made in July by Christian Böhm, head of the Austrian pension fund association (FVPK).

If Zeilinger's estimate is right, his own pension fund - one of the nation's top ten - would be well above the average with 6.7% returns, the best performance since the creation of the company ten years ago.

The official fund performance figures are to be released in a few weeks' time.
Bonus Pensionskassen increased its assets under management by 13.4% in 2006 to €231.8m and says it is "fighting for sixth place" among Austrian pension funds.

Eighteen thousand people are covered by BONUS supplementary pensions and the fund has contracts to run occupational pension schemes with 400 companies.

Earlier in January, the Austrian pension fund ÖPAG announced its returns dropped from almost 12% in 2005 to just over 5% last year.