AUSTRIA - Bonus Pensionskasse, Austria's smallest multi-employer pension fund, the has just announced it has a new head and revealed the €246m fund outperformed the market by 0.34 percentage points.
At a press conference in Vienna today, Bonus revealed Peter Deutsch is the new chairman of the board, previously of insurer Zurich Kosmos, which is the majority shareholder in the Bonus Pensionskasse along with Generali insurance which holds 12.5%.
Deutsch replaces Markus Zeilinger who left Bonus at the end of last year and has since set up a severance pay fund, the "fair finance" BVK. (See earlier IPE story: New player enters Austrian MVK market)
Performance ranged among the seven different portfolios within Bonus from 0.36% to 4.37%, the worst performer being the portfolio with the lowest equity exposure of between 20% to 30% while better performing portfolios had 40-50% exposure.
Overall Bonus had 34% of its total assets in equities by year-end 2007, along with 64% in bonds and 2% in real estate.
"We have a long-term asset allocation which we will stick to, but at the moment we are putting new inflows into money market instruments," explained Georg Daurer, the only other member of the board at Bonus.
Assets in the pension fund increased 5.67% over the year while member numbers grew by 7.38% to 18,571.
The severance pay funds have recently been renamed BVK from MVK to include self-employed which are included in this mandatory sector since beginning of this year.
The Bonus severance pay fund returned 1.69% for the last year compared to a market average of 1.94%.
Wolfgang Huber, chairman of the board at Bonus MVK, which will be renamed BVK in June, has some political demands in order to ensure a better performance in the future.
"A 1.53% contribution by employers to the funds will not ensure the level of severance pay promised by politicians at the funds' inception in 2003," he explained.
"Back then, the calculations were made on a basis of an average of 5-6% return per annum."
An increase of contribution would therefore be necessary as well as other changes to the regulatory framework, Huber pointed out.
"We could create higher returns, without increasing the risk, if people had to leave the money in the funds for 10 years instead of being allowed to take it out after three years," he added.
Huber said he could also see the severance pay funds play a larger role in the second pillar sector in the future.
In general, Bonus believes there is a lack of incentive for employers to offer Pensionskassenlösungen for their employees, particularly in relation to tax.
"Furthermore, the legislation is quite complex which confuses people," said Huber.
"There is currently little support for building up the second pillar, both from politicians as well as social partners," added Deutsch.
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