Austrian severance pay funds return 2.6% in 2010
AUSTRIA - The nine Austrian severance pay funds (Vorsorgekassen) returned 2.6% on average last year.
Assets in the mandatory system grew to €3.6bn from €2.8bn in 2009, the association of the Vorsorgekassen confirmed to IPE.
Two of the largest providers of severance pay funds, which are mostly offered by the same houses that also run a Pensionskasse, have reported individual results.
Valida plus, the severance pay fund of the Valida group, reported a 3.4% return for 2010 (after 4.4% in 2009), with assets growing from €627m to €817m.
The group said a short-term asset allocation was necessary in those funds, as people can withdraw the money after three years.
Valida has therefore invested close to 58% of its severance pay fund in money market instruments, against 51% in 2009, and another 29% in corporate bonds, compared with 33% in 2009.
Cuts were made regarding the share of government bonds - from 10.6% in 2009 to 8% in 2010 - as well as that of equities - from 5% to 1.4%. In turn, alternatives were increased slightly, from 1.6% to 3.7%.
The VBV group reported a return of 2% (after 3.35% in 2009) for its severance pay fund for 2010, bringing the long-term average since inception in 2003 to 3.4%.
The VBV Vorsorgekasse grew its assets from €973.1m to €1.2bn.
Since 2003, every employer has had to pay into a severance fund for each of its employees. Self-employed people have paid into the funds since 2008.