AUSTRIA – Pension fund association FVPK has urged the government to do more to boost corporate pensions, noting that only one-fifth of all Austrian workers have access to this pension – one of the lowest rates in the EU.

“Just like in other EU countries, Austrian workers need a corporate pension along with state and private pensions to maintain their living standards in retirement,” said Fritz Janda, managing director of the FVPK.

Janda noted that the absence of a corporate pension was a particular problem among small- to midsize enterprises (SMEs) in Austria.

To remedy the problem, Janda called on the government to, above all, allow tax write-offs to companies and employees who contribute to corporate pension plans. “If this were done, the government would go a long way in closing the pensions deficit and also create a new economic impulse,” he said.

To boost the second pillar in Germany, the government in 2002 gave workers the legal right to a defined contribution scheme as part of the Riester pension reforms.

Since then, around 60% of German workers have access to a corporate pension, compared with almost 100% in Switzerland and the Netherlands.

But Janda said he did not favour the Austrian government requiring employers to provide a corporate pension, adding that instead there should be a “collective solution” agreed by employers and unions.

Janda’s association represents 21 Pensionskassen, or pension funds that have a conservative approach to investing. These, in turn, insure 450,000 workers and have €11bn in assets.

Regarding the asset allocation of its members, FVPK said they allocate 65% to fixed income, 34% to equities and just 1% to real estate. It added that their average return in past years has been 6.7% per annum.