Austrian pension funds see AUM soar by 3.03%

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The assets under management (AUM) for the eight Pensionskassen in Austria managed to shoot up by 3.03% in the first three months of the year, according to the country’s Financial Market Authority (FMA).

The FMA’s latest quarterly report shows that the Pensionskassen AUM for Q1 2024 stood at €27.18bn, having increased by €800m.

“In so doing, the [Pensionskassen] for the first time exceeded the record levels as of end-of-year 2021, that stood at €26.98bn and therefore needed over two years to at least compensate for the consequences of the multiple shocks and crises,” the FMA stated.

According to figures released by the Austrian Oesterreichische Kontrollbank AG (OeKB), which was created by the banking industry to boost capital market activity, most of the increase in assets came from investment performance, with multi-employer Pensionskassen (2.76%) performing better than single-employer Pensionskassen (2.02%).

The FMA noted that the performance of Pensionskassen was “very volatile over the short term” but “relatively stable over the long term”.

Full-year performances over the last years confirmed this statement with pension funds having returned 6.41% on average for 2023, having previously closed 2022 at -9.7%.

Since inception of the system in 1991, Austria’s second pillar pension system has generated an average annualised return of just under 5%.

A small part of the increase in AUM is also down to new entries to pension funds, which is confirmed by the record figure of 1.08 million Austrians (up from 1.06 million at year-end 2023) who are already receiving a pension from a Pensionskasse or will do so in future. This means around a quarter of the working Austrian population is now in a pension fund.

As of end of March 2024, almost 41% of the assets of Austrian pension funds were invested in equities via investment funds. Another 33% were held in bonds, while real estate made up another 11.5%, loans and credits 2.8% and another 5.7% was parked with banks. The remainder is made up of alternative investments and other asset classes.