Despite sustained growth in the Austrian market for Pensionskassen (PKs) the number of providers has halved since 2006, to ten. The three largest PKs manage a total of 75% of the total assets under management. As at year end 2016, assets under management stood at more than € 20.8 billion. Currently approximately 22% of all non-self-employed (900,000 persons) are enrolled in the Pensionskassen system, with 10 % of them already receiving the additional occupational pension. The average performance of all investment and risk sharing groups has been 5.3% since they were established. These findings have emerged from the “2017 Report on the state of Austrian Pensionskassen”, which was published today by the Austrian Financial Market Authority (FMA).
“In spite of there having been a considerable concentration in the Pensionskassen market, no adverse effects have been observed with regard to their competitiveness,” remarked the FMA’s Executive Directors, Helmut Ettl and Klaus Kumpfmüller. This can be justified by virtue of the fact that the concentration process has in particular affected single-employer Pensionskassen. While the number of multi-employer Pensionskassen has only fallen by one, from seven to six, since 2006, the number of single-employer Pensionskassen fell in the same period from 14 to four. The concentration process has not caused any severely changes for beneficiaries (recipients and entitled), since as a rule the individual investment and risk sharing groups (IRGs), in which the pension company commitments are managed, are transferred as units as whole. The number of IRGs has therefore remained roughly the same.
Long-term positive performance
The annual return on investment of all IRGs since the Pensionskassen system was established in Austria in 1991 stood at around 5.3% per annum according to calculations by the Oesterreichische Kontrollbank, although yearly results have been very volatile, fluctuating between extremes of +13% (1993) and -13% (2008), although 22 years have had positive results, compared with only four having negative results In 2016 performance was +4.2%, and in the 1st half of 2017 +3.3%. There are, however, large differences in performance depending on the risk orientation of asset classes, as well as between different Pensionskassen with the same asset class risk orientation.
Austria’s Pensionskassen have invested more than 95% of their assets under management in funds, in particular in special funds. Around 40% of the exposure is in government debt, around one third in shares, 13% as cash held at credit institutions, 5% in real estate and the rest in alternative investments.
European Economic Area
In the European Economic Area (EEA) almost 113,000 company old-age provision facilities manage assets for 52.7 million beneficiaries of around € 3.8 trillion, which corresponds to around 26% of Gross Domestic Product (GDP) of the European Union. 86% of commitments of company old-age provision is split between four countries: Germany, Italy, the Netherlands as well as the United Kingdom. In Austria the assets under management of the corporate provision schemes stand at around 6% of GDP.
The “2017 Report on the state of Austrian Pensionskassen” (Bericht 2017 über die Lage der österreichischen Pensionskassen) can be found in German only on the FMA’s website at: https://www.fma.gv.at/pensionskassen/offenlegung/lage-der-oesterreichischen-pensionskassen/
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-6006
+43/(0)676/882 49 516