The Winterthur Pensionskasse recently formed by the Swiss group in Vienna is seen as an important step in its pensions provision in Austria and for expansion in central and eastern Europe.
The Pensionskasse has just become operational as an independent pension fund and taken on its first three clients, one of which is group company Winterthur Insurance Austria. The fund hopes to have AS200m invested by the end of the year.
The fund is also on a shortlist of six to run the money of Marktordnungs-stelle Agrarmarkt Austria, a semi-public organisation responsible for distribution of agricultural products. The five other shortlisted candidates are APK-Allgemeine Pensionskassen, BVP-Pensionskassen, ÖPAG-Pensionskassen, Vereinigte Pensions-kasse and Victoria Volksbanken Pensionskassen.
The new company, Winterthur Pensionskasse, the first in Austria to have a single shareholder was set up in December last year. The move was at least indirectly prompted by the strength of the Austrian unions which have been negotiating for the inclusion of pension contributions as part of the compulsory collective bargaining system in Austria. Winterthur, judging the resulting market conditions to be right, was prompted to set up its own scheme. It has been a shareholder in another fund for the past five years.
The company believes that it holds a distinct advantage over other pension investment vehicles. The spokesman said: We are the only pension fund which has a single shareholder which demonstrates a clear strategic ap-proach. Other pension funds have up to 25 or 30 shareholders who all have different interests. They are trying to get into the game but most don’t have such a clear strategy.”
He added: “We are aiming to have four or five large clients and the rest small clients.” The range, he said, could be between small companies with two employees to those with 2,000 employees. Winterthur Pensionskasse hopes to attract the business of companies who are transferring from the currently predominant book reserve schemes as well as those commencing contributions to a scheme without the transfer of existing commitments.
The asset allocation of the scheme will be 10% money market, 55% Austrian bonds, 20% international bonds and 15% international equity.
Austrian legislation provides some tax advantages to pension funds: in-vestment income is tax-free while employer contributions are deduct-ible and not taxed until retirement benefits are paid.
The Winterthur group had already established itself a position in the Austrian market, through its insurance business. It has provided four companies and one independent pension scheme with management and know-how and supplied the administration software known as Winpension to over 50% of the country’s pension funds, but the market was restricted by the predominance of book reserve schemes.
Winterthur’s spokesman said: “We plan to start expanding across Europe when the relevant laws are passed and the markets seem worthwhile.” Winterthur currently has pension funds in place in the Czech Republic and Hungary. The spokesman added: “The strategy of Winterthur Group is that there are laws that help a separate pension fund company to operate, which is the case in Austria, to do so. Otherwise one uses the normal insurance company.” John Lappin”