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Impact Investing

IPE special report May 2018

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Three largest Austrian Pensionskassen increase hold on market

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  • Vienna, Austria

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The three largest Austrian Pensionskassen are increasing their dominance of Austria’s Pensionskassen market, holding 73% of the €17.4bn managed by the 16 funds, according to the Austrian financial supervisor (FMA).

In 2012, VBV, Valida and APK, accounted for just over 71% of the assets in the sector, but consolidation such as APK takeover the company pension fund of the Austrian Economic Chamber WKÖ increased the share.

Adding roughly another €700m from the Valida Industrie Pensionskasse – the former company pension fund for Siemens – to the assets held by Valida, the market share of the three largest funds increases to almost 77%.

Additionally, on average multi-employer pension funds, including the three largest Austrian funds, achieved a better return in 2013 at 5.3% than company pension funds which only managed 3.9%.

It was the first time in three years that the multi-employer funds outperformed the company Pensionskassen. The performance of the smaller funds in the post-crisis year of 2009 was already significantly better, at 12.6% annual return, compared to a negative performance of -8.45% for the larger funds.

However, performance figures in Austria should only ever be viewed as a very rough average, as multi-employer funds have to offer different portfolios for larger clients while company pension funds only put in place one or two portfolios.

Under the most recent amendment to the law governing Austrian Pensionskassen, some pension funds used the opportunity to reduce the number of portfolios, which lead to an overall decrease from 140 to 124 year-on-year across all pension funds. However, some schemes created sub-portfolios instead.

Overall, the FMA confirmed a 5.1% average return for all Austrian Pensionskassen for 2013, with returns ranging from 0.4% to 5.8% depending on the risk-return profile of a portfolio.

For the Betriebliche Kollektivversicherung (BVK), an insurance-based occupational pension solution, the FMA reported a 20% increase in assets over the last year to €643.4m.

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