Austrian multi-employer schemes outperform over 2013 – Mercer
Austrian multi-employer pension funds returned 5.3% in 2013, while company pension funds managed a 3.91% return, according to estimates from Mercer.
The consultancy said the “decisive lever” for multi-employer schemes’ outperformance was their equity allocations, which stood at 28.23% on average in company pension funds and 36.71% in multi-employer funds.
Looking at the various risk portfolios Austrian Pensionskassen can offer under the new pension fund law – with not all pension funds offering every risk level – Mercer found Allianz was the best performer overall.
The Allianz Pensionskasse outperformed the other five multi-employer funds in all categories – conservative, balanced, active and dynamic – but one.
In the defensively invested portfolios with an equity allocation below 16%, the largest pension fund VBV had the best performance.
The spread between the best and the worst performers per category was greatest in the dynamically managed (highest risk) portfolios, at almost 400 basis points.
Overall, the 16 Austrian Pensionskassen returned 5.14% on average for 2013.
Mercer’s figures confirmed those released earlier by the Austrian pension fund association FVPK.
Owing to the very fragmented portfolios of Austrian multi-employer Pensionskassen, which have to offer each company with more than 1,000 employees its own risk/return portfolio, the overall average performance only has limited representative value, Mercer said.
Instead, the consultancy looked at only the 26 risk/return portfolios – out of more than 100 in total – that are open to new entrants and found that those returned 5.2% on average, which is above the market average.
As for severance pay funds, or Vorsorgekassen, Mercer also noted a wide spread in returns, with the average return at 2.8%.
All Vorsorgekassen had an equity allocation well below the 16% threshold.
The worst-performing Vorsorgekasse, which was not named by Mercer, returned only 0.78% over the period, while Bonus performed best at 4.06%.
In total, the 10 Vorsorgekassen are now managing €6.2bn in assets.