AUSTRIA - Kurt Bednar, managing director of Mercer Austria, has called for finance minister Karl-Heinz Grasser to show more courage in reforming the pension fund law, or PKG.

Bednar has spoken out as the ‘advocate’ for its clients, in a document published after the period of technical work on the draft had been concluded. It said the reform of the PKG was “a blatant disappointment”.

“Mercer demands in the name of all pension fund customers the holding of a expert hearings at the financial committee of the parliament and that the finance minister shows more courage for a genuine reform of the pension fund law."

Time for the organization of a ‘useful reform’ was running out, Mercer warned.

Bedner spoke as head of Mercer and founder of the ‘protection association’, which he started last year with customers of pension funds to discuss contradictions and lacks of the present law.

“The interests of individual pressure groups may not be the centre of attention with the change of the law, but the security of the corporate pension system,” Bednar added.

“As experts have feared already for a long time, the industry-wide internal controversy over the business has induced the Treasury to give pension funds only a mini-reform,” Mercer said.

The current amendment draft to the law was a "nice attempt" but “useless in practice”.

Mercer called for hot topics like the minimum return reserve to be tackled, to do ‘something good for the Austrian financial markets’ and to bring about an ‘intelligent’ implementation of the EU pension fund directive.

Mercer also commented on asset-liability matching, saying there were new rules but “no obligation for professional ALM”.

Chances were also being missed on the European Union market. “For months Mercer points out that the European Union guideline would offer the unique chance to set foot in other, in particular new, member states for its experience.”

“With the implementation of the draft it is to be expected that the Vienna will very probably lose even some foreign cash.”

A spokeswoman for the finance ministry declined to comment.