The pension company system is one form of company old-age provision in Austria. The basic features of Pensionskassen, including how they function in general and their activities as well as the related responsibilities of the Financial Market Authority, are presented below.
Below you will find information about:
The Austrian pension system rests on the three pillars of:
Pensionskassen are a form of company old-age provision. Employers pledge to regularly make voluntary contributions to the old-age provision fund of their employees. Employees can additionally make voluntary contributions to the fund. These contributions are managed by the Pensionskassen.
Pensionskassen are classified as either single-employer or multi-employer. Single-employer Pensionskassen are active on behalf of one employer. Multi-employer Pensionskassen are entitled to carry out pension company activities for more than one employer.
Pensionskassen invest the contributions paid into the fund. To do this, these contributions are pooled in what is referred to as “investment and risk sharing groups” (IRGs), each comprising at least 1 000 individuals. This results in several advantages:
Pension benefits are paid out by Pensionskassen in the form of:
Old-age pensions are paid for life. Survivors’ pensions are paid out according to the terms stipulated in the agreement. Invalidity pensions are paid out for the duration of invalidity (where correspondingly stipulated in the agreement).
Pension company commitments can be based on defined contributions or defined benefits or combinations of the two.
For providing their services, Pensionskassen receive remuneration at a level that is appropriate and customary for the market.
The Financial Market Authority supervises the Pensionskassen. The FMA performs the official tasks and uses the powers specified in Article 2 para. 4 of the Financial Market Authority Act (FMABG; Finanzmarktaufsichtsbehördengesetz). The tasks of the FMA include granting licences for pension company activities and monitoring ongoing business operations.
The FMA monitors Pensionskassen to ensure compliance with the provisions of the Pensionskassen Act (PKG; Pensionskassengesetz). When carrying out the tasks assigned to it, the FMA is obliged to consider the interests of the Austrian economy in a functioning pension company system as well as the interests of persons entitled to receive benefits from a Pensionskasse in future or already receiving such benefits.
Austrian Pensionskassen are entitled to carry out activities only under a licence granted by the FMA. For the licence to be granted, certain requirements must be met, such as:
Institutions for occupational retirement provision that are licensed in a Member State of the European Economic Area are also entitled to pursue pension company activities in Austria. In such cases, the supervisory authority of the home Member State is responsible for the supervision of activities carried out in Austria.
The most important supervisory activities of the FMA include:
For assessing these objectives, investment data, provided on a quarterly basis, are available in addition to the audited financial statements of the Pensionskassen, the audited reports on activities of the IRGs . and the relevant audit reports by the statutory auditors, which are available each year. The FMA additionally conducts management talks, company visits, brief inspections and on-site inspections.
Financial Market Authority Act (FMABG; Finanzmarktaufsichtsbehördengesetz)
Pensionskassen Act (PKG; Pensionskassengesetz)