Austria’s €2bn Vorsorgekasse VBV has announced plans to reform its fee structure from next year, rewarding people who leave their money in the system for a longer period.
Under the new structure, members will pay 1.9% in fees for the first five years, 1.4% after that and, from the tenth year onwards, 1%.
“This is the legal minimum for fees in Vorsorgekassen,” VBV said.
One of VBV’s competitors, the €1.45bn Valida Plus Vorsorgekasse, told IPE it would lower its own fees from 1.9% to 1.5% from January 2017 for all members – regardless of how long they have been contributing to the Vorsorgekasse.
Since the implementation of these severance pay funds in 2003, Austrian companies have been required to make contributions for each employee amounting to 3.5% of salary.
Employees can then take the money out after three years with the company.
Because the system is not officially designed as retirement provision, many people do take out the money or leave it dispersed over various Vorsorgekassen after changing jobs.
To date, the 10 Vorsorgekassen on the market have collected more than €6.5bn in assets.
But, in order to gain new assets, the funds must convince companies to change providers.
Last year, Valida Plus managed to gain the major Austrian retailer Spar, with 22,000 employees, as a new client.
In other news, Valida Consulting has taken on the administration of the supplementary pension plan of Austrian Public Accountants (Wirtschaftstreuhänder).
The pension plan of undisclosed size, to which all members of the Chamber have to make contributions, had re-tendered the administration mandate.
The previous admin company was Concisa , a subsidiary of the Bonus Pensionskasse.