Austria’s ÖPAG to increase DC benefits

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AUSTRIA – ÖPAG, one of Austria’s multi-employer pension funds, says that following a good performance in 2005, it will increase pension benefits for members in its defined contribution plan by between 0.5% and 2.5%.

Thanks in part to last year’s bull run on equities, ÖPAG finished 2005 with a return of 11.8% on its €2.5bn in assets. This is slightly above the 10.4% average for its peers, known as Pensionskassen.

“With this result, we are able to increase the benefits for future pensioners as well as expand our reserves to cope with future developments,” ÖPAG said in a statement. The fund’s reserves equal 7.3% of total assets.

Citing statistics from the Austrian national bank, ÖPAG added that in each of the last eight years, its return was more than one percentage point higher than that of five other Austrian Pensionskassen.

ÖPAG also said that during 2005, it increased both the number of firms it serves (+2.8% to 4,632) and the number of contributing members it has (+3.8% to 93,510). The scheme also has 7,830 pensioners, to whom €55m was paid out in benefits.

ÖPAG did not, however, disclose its strategic asset allocation for 2005.

At the end of 2004, the scheme had nearly 70% invested in fixed income and roughly 20% invested in “other securities” - chiefly equities. The remaining 10% was spread between cash, loan assets and direct property investments.

Earlier this month, ÖPAG rival APK said it finished 2005 with a return of 12.1% on its €2.1bn in assets.

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