Austrian pension funds delivered solid, if slightly lower, returns in 2025. Across the five multi-employer schemes, which manage €30.6bn in assets, average returns came in at 4.88%, down from 7.77% in 2024.
“In 2025, equities performed very well and the exposure was above 40% on average in the pension fund portfolios both in 2024 and 2025,” Andreas Zakostelsky, head of WKO, the Association of Austrian Occupational Pension and Provision Funds, told IPE at a press conference in Vienna this week.
Bonds accounted for another 40% of an average portfolio, with real estate at around 9% and the remainder in alternatives.
Austria’s largest pension fund, VBV, recorded strong returns in line with its equity-heavy strategy.
Günther Schiendl, chair of the board, said: “The equity strategy has rendered a significant outperformance in 2025. Bond and private debt portfolios have delivered reliable results.”
VBV, which manages €9.75bn, does not report a single average return for all portfolios. Its “conservative” portfolios returned 4%, while “dynamic” ones achieved 7%, compared with 6% to 12.5% in 2024. Last year, VBV also took on IBM’s company pension plan, pushing assets above €10bn.
Other Pensionskassen have not yet reported their individual results.
Provident funds
The six provident funds (Vorsorgekassen), which manage €23.7bn in mandatory severance pay, saw lower returns due to stricter investment rules. In 2025, average returns were 3.6%, down from 4.9% the year before.
VBV’s Vorsorgekasse outperformed, returning 4.8%.
Pension reform talks
Zakostelsky said representatives from provident and pension funds will meet government officials in the first quarter to discuss pension reforms proposed in a draft bill last Christmas.
One likely outcome is a “Generalpensionskassenvertrag” allowing people to transfer provident fund assets to a pension fund for annualised retirement payouts, even if their employer does not offer a plan.
Discussions will also cover guarantees and the three-year lock-in period for provident funds, which could boost performance closer to that of Pensionskassen.
For pension funds, the industry wants the choice of discount rates (Rechnungszins) at retirement and an opt-out life cycle model enshrined in law. New regulations could be passed over the summer. Tax incentives for contributions are also on the agenda.
Zakostelsky cautioned against overly ambitious proposals in the draft bill.
“We are thanking the government for having taken on the not easily digestible subject. Each of the three coalition partners has meant well,” he said. “Now we have to make sure it becomes clear that not everything that is meant well goes together.”
He singled out proposals allowing withdrawals “in cases of hardship” or unrestricted fund switching. “This would destroy the performance,” he said. “We should not be blinded by too romanticised ideas.”
