AUSTRIA – Austrian pension funds made average returns of 7.3% in 2004, according to the country’s Association of Pension Funds, FVPK.
The association, which includes multi-employer pension scheme APK Pensionskasse and car firm BMW, said that its members returned between four and 10% last year. Its members have more than €10bn in assets under management.
FVPK’s Christian Böhm commented that the average increase has been up to two percent.
“The loyalty of our customers, also in difficult times, has been repaid with good returns and a higher degree of safety,” Böhm said.
The FVPK has also forecasted a “great growth potential” especially for small-medium funds in 2005 in a statement.
The association went on saying that the yearly result represented only a snapshot. “Long-term growth has real meaning for the assessment of occupational pensions,” the statement said.
Kurt Bednar, managing director with Mercer Human Resources Consulting said he had not had the time yet to examine the results but added: “We know of some FVPK’s sub-funds that have met this figure. However, since many sub-funds are still without numerable reserves it is feasible that a number of pensions will be reduced.”
Bednar, who founded a pension customer association, criticised the latest developments of the reform to the pension fund law, or PKG. This has allowed insurers to compete with pension funds without sharing their disclosure obligations.
“Now insurers which for long time have claimed unfair treatment are entitled to offer similar products but without transparency whereas pension funds got a load of regulations aiming at more professionalism and transparency,” he stated.
“Altogether the road is good since there is the long demanded alternative but at the price of lacking comparability,” he continued.
Insurers, he said, had “hurt themselves by blocking more transparency”.
Last September Bednar called for finance minister Karl-Heinz Grasser to show more courage in reforming the PKG but he conceded his call for more courage came to nothing. “We have tried via the finance committee but in the end nothing came out of it.”