The performance of Austrian pension funds has rebounded in the second quarter of this year with a positive 5.44% despite market volatility, according to figures released by the association of Austrian occupational pension funds.
The overall returns on investment for the first half of the year is currently on average -4.58%.
According to Fachverband der Pensionskassen, an uptick in equity and financial markets meant positive developments also for the eight pension funds, five multi-employer pension providers and three single company pension schemes in Austria.
Andreas Zakostelsky, chair of the Fachverband der Pensionskassen, said domestic pension funds reacted “very professionally” to the turmoil caused by the coronavirus pandemic in the spring.
He added: ”The goal of [Austrian] pension funds in the next part of the year is to generate positive performance again. Their long-term investment returns are higher than practically all other forms of investment.”
Zakostelsky believes that in the long term a slump like the one in the first quarter of the year has hardly any effect on most pension funds.
So far, pension fund performance has yielded on average a return of 5.4% per year over the past 29 years as of 31 December 2019, according to the Fachverband der Pensionskassen.
Positive investment returns in the past years led to pension funds building up reserves.
Earlier this year, the COVID-19 crisis had at its peak a negative impact on equity markets and, as a result, on the return on investments for Austrian Pensionskassen.
According to Österreichische Kontrollbank, a credit institution that records quarterly pension funds’ performance, returns for company pension funds were -5.9% in the first quarter, and -10.4% for multi-employer pension providers.
Assets under management of Austrian pension funds fell by 9.8% in the first quarter of 2020 to €21.9bn, compared to €24.3bn in the last quarter of last year, according to a report by the Financial Market Authority.