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FMA study “State-sponsored retirement provision in 2009”: recovery in the wake of the crisis year

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“Seven years after its introduction, the state-sponsored retirement provision could again demonstrate its effectiveness in 2009, in the face of a difficult capital market environment and continued reform debates. The number of contracts and deposits increased, revealing that the state-sponsored retirement provision continues to be a key product for old-age provision in the Austrian market,” FMA Executive Directors Helmut Ettl and Kurt Pribil stated, commenting on the results of the FMA study “The market for state‑sponsored retirement provision in 2009”. Compared with the previous year, the number of contracts rose by 8.2% to 1,450,048 in 2009, the earned premiums amounted to €978 million (+6.7% on the previous year) and the assets managed to €3.82 billion (+36.7%) by the end of 2009. The average annual premium was €594 for insurance undertakings and €763 for investment fund management companies. After share prices had slumped drastically in 2008, having a strong negative impact on the performance displayed by providers of state-sponsored retirement provision, a marked trend towards recovery was seen in 2009: volume-weighted performance plus 7.8% in 2008 (2008: -15.3%).

As in previous years, insurance undertakings clearly dominated the market for state-sponsored retirement provision. They managed to increase the number of contracts by 8.9% to 1,331,661, giving them a market share of 91.8%. In the case of investment fund management companies, the number of contracts rose by 0.3% to 118,387, accounting for a market share of 8.2%. From a performance perspective (also volume-weighted), at 8.7% the funds of insurance undertakings also did better than those of investment fund management companies with 1.9%.

Contracts for state-sponsored retirement provision must, by law, run for a term of at least ten years. Investment fund management companies offer only ten-year contracts, while insurance undertakings also offer contracts with considerably longer terms. At the end of 2009, almost two third of the contracts had terms of 25 years or more, and a fifth were even running for more than 45 years.

“Consumers continue to embrace the state-sponsored retirement provision. After seven years every fourth Austrian under 60 has a contract for state-sponsored retirement provision,” the FMA Directors noted. “The continued interest in long-term commitments proves that the state‑sponsored retirement provision is not replacing existing savings methods but being used to build up old-age security.”

For further information please contact
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-5106
+43/(0676)/882 49 516

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