The Austrian occupational pension fund association, Fachverband der Pensionskassen, is calling on the government led by the new Chancellor Alexander Schallenberg to amend the proposed eco-social tax reform by adding the so-called ‘green pension’.
The association expects in fact that the proposed tax reform will find a majority in parliament under Schallenberg.
At the beginning of October, the eco-social tax reform key points were presented to the public by Chancellor Sebastin Kurz, who then resigned under suspicion of corruption.
Under the plan, the government would introduce a price on CO2 emissions of €30 per tonne in 2022 that would gradually increase to €55 in 2025, among other measures, but omitted Pensionskassen and Vorsorgekassen.
The change proposed by the Fachverband to the eco-social tax reform would support efforts to restructure the economy by moving capital towards green or sustainable investments, it said.
“The green pension would lead to a ‘double dividend’: a positive net effect on economic performance and a positive environmental effect,” said Andreas Zakostelsky, chair of the Fachverband.
According to the association’s recommendation, a tax break would apply to contributions to company pension schemes if savings flow into sustainable forms of investments.
At the same time, employers’ contributions would automatically be transferred to the green form of investment, further reinforcing the “environmental aspect” of company pensions, said Zakostelsky.
Austrian Pensionskassen and Vorsorgekassen currently invest around €40bn, also increasingly relying on sustainable investments, the Fachverband added.
The pension fund association therefore intends “to continue this trend” and it is now calling to amend the plan for a tax reform to steer pension savings further towards sustainability, it noted.
Zakostelsky said that Austrian Pensionskassen are already investing more than 80% of assets under management sustainably. “However, there is still further potential,” he said, to allocate assets in sustainable forms of investments.
In a survey conducted by the association, 88% of the respondents spoke out in favour of increasing green investments following the COVID-19 pandemic.
A previous survey showed that Austrian Pensionskassen invest €15bn sustainably, representing 61.5% of the pension funds’ total investment volume.
According to figures published by the association, Austrian Pensionskassen recorded on average a 5.55% performance in the third quarter of this year, up by 0.77% from the first half of 2021.
Commenting on the results, Georg Daurer, board member of the BONUS Pensionskasse, said that equities and other riskier investments saw a positive development in Q3 2021.
A positive economic environment and the expectation that vaccination campaigns would help to overcome the COVID-19 pandemic in the near future – despite the number of infections rising again in some countries – characterised the developments on international financial markets, he added.
Yields on euro zone government bonds fell until the beginning of August, but rose again afterwards and at the end of September were roughly back at the level seen at the beginning of the quarter, Daurer said.