GrECo market study compares the services of all eight providers. Why companies should consider switching pension funds and which factors are crucial
Vienna (OTS) –
- Yields are rising again: The average return over the last ten years was +1.5% annually; In 2023 it was +4.5% pa
- Assets under management increased by around EUR 2 billion in 2023 and amounted to EUR 18.7 billion at the end of the year
- Long-term performance below expectations when new severance pay was introduced: In the long term, even providers with the highest annual performance remain below the 3% mark
- Sideways market movement expected: In the future, most pension funds will continue to focus on security and low volatility in the assets they manage
Vienna, April 26, 2024 – From Allianz to VBV, there are some differences between the eight Austrian company pension funds. For the 17th time, the GrECo Health & Benefits Consulting Team is comparing theirs exclusively in the annual market study Performance, Sentence guarantee, Capital resources, Profit sharing and volatility.
“Many companies pay a fixed percentage of gross wages into their pension fund without informing themselves about their development. With our annual market analysis, we provide an overview and enable you to change providers quickly and easily if necessary,” explains Joachim Schuller
Competence Center Manager Health & Benefits, die Studie.
Average return in 2023 significantly higher than in the previous year
After a challenging phase in the previous year, the pension funds were in a more promising situation again in 2023. The industry recovered from an average loss of
7.7% in 2022 and was able to re-invoice the asset management costs. While the average annual return over the last ten years was +1.5%, in 2023 it was +4.4%. The performance range of the individual providers was between +2.6% and 7.9%.
Overall, the assets under management of company pension funds increased by around two billion euros from 16.7 billion euros in 2022 to around 18.7 billion euros in 2023.
Long-term performance remains below expectations
Currently around 90% of employed people in Austria are looked after by the pension funds. The average assets of a beneficiary were EUR 1,710 at the end of 2023.
What is of particular interest to those entitled to benefits is the amount of the annual investment income of the company pension funds. However, the average values for the observation periods of three, five and ten years as well as since the introduction of the new severance payment system look significantly less positive. Even the providers with the highest annual performance remain below the 3% mark in the long term.
“The target return of 6% when introducing the new severance pay scheme could not be achieved by any provider in recent years due to the market situation in combination with the capital guarantee that is mandatory for everyone. It can therefore be assumed that the long-term performance will probably settle in the range of 2-3%.”
, so Schuller.
Providers with a high share quota are ahead
Those providers that relied on a higher equity quota and therefore accepted a higher investment risk performed above average in 2023, especially APK (7.9%) and Valida (5.1%).
In addition to the investment successes, the fluctuation intensities of the individual providers over time are also interesting for decision-making. The greater the deviations from the mean, the greater the volatility. It is also clear here that, for example, the APK, which performed very well in 2023, has at the same time been significantly more volatile than other providers in recent years.
Outlook: Safety remains the top priority
Due to the gross capital guarantee and the legally provided options for the beneficiaries, the company pension funds are bound to far-reaching requirements. Nevertheless, different priorities in investment can be identified between the individual providers. The assets under management were primarily divided into bonds (64.6%), balances with banks (7.3%), stocks (13.2%), real estate (6.3%) and loans and advances (5.1%). invested.
In the future, most pension funds will continue to focus on security and expand their securities, which are held until maturity, in order to stabilize their performance results in the long term and reduce volatility.
“What awaits us in 2024 is difficult to predict. What is certain is that there will probably be no big surprises or excessive euphoria. Rather, the industry as a whole is assuming that the market movement will be largely sideways“
explains expert Joachim Schuller in conclusion.
Questions & Contact:
GrECo International AG | Elmargasse 2-4 | 1190 Wien | www.greco.services
Mag. Judith Fleck | M +43 664 88 39 05 09 | E j.fleck@greco.services