AUSTRIA - Austrian pension funds have reported a negative first quarter, with the country's 17 Pensionskassen showing a 0.7% loss for the period between January and March.

Over the same period last year, the funds had managed to generate close to 3% in returns.

The shift in the exposure to various asset classes suggests major losses were suffered in global equities.

The share of non-euro-denominated equities dropped from 16.6% to 14.6% year on year, while the share of euro-denominated equities increased from 17% to 19.5%.

There was also an increase in non-euro-denominated bonds, reflecting another shift in asset allocation, as some Pensionskassen had contemplated raising their investment in that asset class over the last year.

The share of this segment increased from 1.9% to 3.2% while that of euro-denominated bonds fell from 62% to 59.5%.

Similarly, the increase in real estate exposure from 2.5% to 3.1% was not only down to changes in the value of other portfolio components.

Last year, the largest Pensionskasse, VBV, as well as the Siemens Pensionskasse, had increased their property investments slightly.

In other news, the supervisory authority FMA reported that, in 2010, three of the 10 severance pay funds (Betriebliche Vorsorgekassen) had breached investment regulations.

No details of the offense or the names of the severance pay funds were released.

But FMA board member Kurt Pribil said he was trying to change that - not only for the severance pay sector, but for all financial service providers.

"Market participants and customers should have the right to know which financial service provider has breached investment regulations," he said at the FMA's annual press conference in Vienna.

At the moment, the FMA is only allowed to publish the names if publication does not "exceedingly harm" the provider.

This means the names of large providers are published rarely, as this would harm them more than the fine imposed by the FMA, while smaller providers can be named.
Pribil said this was "hardly fair".

He added that the FMA was in talks with the financial ministry on the matter and that he was confident of reaching at least a partial agreement.

Pribil stressed that affected providers would have to be granted all possible rights to appeal.

He also speculated that a widening of the mandatory publication rules might also be part of the MiFID-review on the European level.

"But this is in no way certain yet," he added.

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