The market for state-sponsored retirement provision stagnated in 2013. The number of contracts has even slightly decreased, compared with 2012, by 0.13% to 1,635,910, since more old contracts matured than new ones were concluded. The volume of premiums earned in 2013 fell by 4.02%, and amounted to € 1,031.72 million at the end of 2013. The assets under management were also clearly down: while still standing at 24.6% in 2012, the percentage was 8.9% last year. However, at € 7.8 billion, this is 45% of all the assets managed by Pensionskassen (pension companies) after all. The overall performance of state-sponsored retirement provision – volume-weighted and before costs – came to 1.13%, thus clearly below the 5.6% generated in 2012. This was disclosed in “The Market for State-Sponsored Retirement Provision”, an annual study published today by the Austrian Financial Market Authority (FMA).
94.2%, or 1,540,938 in absolute numbers, of all contracts valid as at the end of the year were insurance products, which means their market share has slightly increased by 0.1% compared with the previous year. Products from investment fund management companies had a market share of 5.8%. The decline in these products from investment fund management companies (-2.44%) was nearly balanced by the slight increase in insurance contracts (+0.02%).
The weak performance of state-sponsored retirement provision is mainly a consequence of the consistently low interest rates and the legally stipulated capital guarantee. During the year under review, some 119,533 contracts, or 7.3% of all valid contracts, were reported as having been stopped out. This means that the equity share that can be recognised as income is below 1%, i.e. the products are secured against further downward movements in the equity market, but do not participate in upward movements either. While this applied to only 2.1% of insurance contracts, 93.6% of products from investment fund management companies were affected. Consequently, insurance undertakings managed a positive performance of 1.27%, while investment fund management companies suffered a 0.12% decline.
In 2013, the maximum state-sponsored deposit amounted to € 2,445.50 (2012: € 2,329.88), and the maximum state premium, at 4.25%, thus came to € 103.90 (2012: € 99.02). For 2014, the maximum state premium will be € 106.04.
With regard to maturities of existing state-sponsored retirement provision products, it can be said that they are increasingly regarded as pension products, and rather less as investment products. Not even 10% of all contracts in 2013 had a maturity of 10-14 years, seven per cent less than one year earlier. In other maturity bands, the number increased by 1.5% on average. More than half of all contracts, or 56.21% to be exact, have maturities of 30 years or more.
The complete study is available on the FMA website (in German) at https://www.fma.gv.at/publikationen/studie-praemienbeguenstigte-zukunftsvorsorge/
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-6006
+43/(0)676/882 49 516