Austria’s 13 pension providers, including single company and multi-employer plans, produced an average return on investments of 2.4% over the course of 2015, according to data compiled by pension fund association FVPK.
Because multi-employer pension funds must offer individual asset allocations for certain members, their “very heterogeneous” portfolios produced returns ranging from 0.1% to more than 6.4%, the FVPK said.
Austrian pension funds’ average 28% allocation to equities and 66% allocation to bonds boosted overall returns, with Andreas Zakostelsky, chairman at the FVPK, adding that corporate bonds had “gained in significance” in the portfolios.
He said active equity management also played a “very important” role in the range of performance, as did real estate, which, on average, accounted for approximately 3.5% of portfolios.
According to the FVPK, Austrian pension funds’ long-term performance since the inception of the system in 1991 now stands at nearly 5.6%, and the 10-year average return at 3.8%.
Overall, assets in the system have increased by 3% to €20.2bn year on year.
The FVPK attributed this increase not only to returns on investment but also the increase in new pension fund contracts signed by companies.
For the first time, this number was well above the long-term average of around 200 per year; in 2015, more than 400 companies joined a Pensionskasse, half of them being small businesses.
The number of pension fund providers is now down to 11, with Bonus Pensionskasse having taken over Generali’s company pension fund and the multi-employer Pensionskasse offered by Victoria-Volksbanken.