AUSTRIA – Austrian Pensionskassen returned more than 8.3% on average over the course of 2012, while the more conservatively invested severance pay funds returned 4.25% over the same period.
Speaking with journalists in Vienna, Andreas Zakostelsky, chairman of Austria's pension fund association (FVPK), said last year's "very positive and satisfactory" performance had increased the long-term average for Pensionskasen since their inception in 1991 from 5.5% last year to 5.65%.
Beginning 2012 "very conservatively", Pensionskassen gradually increased their average equity exposure over the course of the year to 23-29%, Zakostelsky said.
The FVPK's chairman also cited investment-grade corporate bonds as another contributor to pension funds' strong performance.
The association reported an increase in active members by 3% to 739,000, which means that around 24% of employed Austrians are now covered by a Pensionskasse.
Zakostelsky said he would like to see this percentage increased to 50% over the next few years, adding that Pensionskassen would focus on SMEs this year, as these companies currently had the lowest share of pension fund contracts.
The mandatory severance pay funds – known as Betriebliche Vorsorgekassen, or BVKs – into which every company has to pay a share of their employees' salaries, saw assets under management increase to €5.3bn, a 23% year-on-year increase.
Because money from these funds can be withdrawn at almost any time, they have to invest the assets more conservatively.
The 4.27% average return posted by severance funds in 2012 was the third best performance in the history of the funds, after returning 5.47% in 2005 and 5.03% in 2004.
The long-term average is now 2.8% since their inception in 2002, including one negative performance in 2008 of -1.97%.
In total, 2.8m Austrians are covered by this system.