Austrian reform 'useless in practice'
Austria’s finance minister, Karl-Heinz Grasser, should show more courage in reforming the PKG pension fund law says Kurt Bednar, managing director of Mercer Austria.
Bednar has spoken out as the ‘advocate’ for Mercer’s clients, in a document published after the technical work on the draft had been concluded. It said the reform was “a blatant disappointment”.
Bednar said: “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."
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 shortcomings in the present law.
“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,” Bednar said.
The current amendment draft to the law was a "nice attempt" but “useless in practice,” he said.
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 ‘intelligent’ implementation of the EU directive.
Mercer also commented on asset-liability matching, saying there were new rules but “no obligation for professional ALM”.
Chances were also being missed in the EU market. “Mercer has pointed out that the EU 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 Vienna will very probably lose even some foreign cash.”
A spokeswoman for the finance ministry declined to comment.