Austria’s VBV Pensionskasse has taken the top spot in terms of performance in investment options with the highest allocations to equity in 2020, according to consultancy Mercer.
The pension fund recorded a 2.52% performance in its defensive option, 3.86% in its active and 5.82% in its dynamic categories.
Overall multi-employers, or überbetrieblichen Pensionskassen, returned 2.33% last year, Mercer said. APK Pensionskasse lead the ranking in the conservative category with 4.19% and in the balanced category with a 4.37% return.
“The pension funds frequently deal with [market] volatility,” said Michaela Plank, principal and member of the country leadership team at Mercer Austria, adding that the “system works” for long-term investments which are crucial for old-age provisions.
VBV Pensionskasse recorded a 3.14% return for its defensive option and 4.99% for its dynamic over a 10-year period.
APK hit a 4.17% return for its conservative option, while Allianz topped the ranking for the balanced category (4.65%) and active (4.74%) over the same time period.
The second and the third pillars of Austria’s pension system will contribute to secure standard of living in old age, and the overall sustainability of the pension system, Mercer said. It is necessary to create tax incentives to reinforce the second and third pillars, it added.
The severance pay funds also showed positive performance results in a challenging 2020. VBV Vorsorgekasse recorded a 2.89% return, followed by APK with 1.84% and Bonus Vorsorgekasse with 1.72%.
The average return for the severance pay funds was 1.37% last year. APK returned 2.51% over a five-year period, ahead of VBV Vorsorgekasse with 2.40% and the Niederösterreichische Vorsorgekasse NOEVK with 2.04%.