IBM has closed its corporate pension fund in Austria after transferring the remaining defined benefit (DB) liabilities to multi-employer Pensionskasse VBV.
The concession to operate the company’s pension fund expired following the termination of the scheme agreement with IBM Austria, according to a note issued by the Financial Market Authority (FMA).
The corporate pension fund had managed IBM’s DB plans, which were already closed to new members.
Defined contribution (DC) plans for active employees have, for some time, been managed separately through a multi-employer pension fund, said Gerald Moritz, managing director at Moritz Consulting.
“The remaining part of the DB plan was transferred to the VBV pension fund. The IBM pension fund was not sold, but no pension entitlements or beneficiaries remained in the pension fund. That had to be closed,” he added.
VBV will take over the management of pension entitlements and monthly payments for IBM employees. Following the integration of the assets, the scheme is expected to exceed €10bn in assets under management, chief executive officer Günther Schiendl told IPE.
Austria’s Pensionskassen sector managed €30.4bn in assets for 1.13 million members at the end of last year, according to FMA data.
Few alternatives to Pensionskassen
Only two company pension funds remain independent in Austria: Bundespensionskasse and the Pensionskasse der Sozialversicherungsanstalt, which serves social security staff.
“In my view, both will continue to exist, although political reasons likely outweigh economic considerations,” Moritz said.
Austrian employers continue to rely predominantly on Pensionskassen to provide occupational pensions.
Alternative arrangements, such as company-sponsored insurance, remain limited in scope, with relatively low awareness of the long-term differences between the two models, Moritz explained.
“Tax-free retirement savings could be considered a basic form of retirement provision, but with a maximum contribution of €300 per year, sufficient retirement savings cannot be achieved,” he added.
Salary conversion models are included in some collective agreements but remain uncommon in practice.
“There aren’t currently new or alternative forms of company-sponsored retirement provision models for larger groups of people,” Moritz said.
