Austrian pension and provision funds saw an “exceptionally successful year” with domestic pension funds achieving a performance of 7.76 per cent in 2024, the Association of Pension and Provident Funds (WKÖ) found.

WKÖ said this was a “very good” result for the customers of the pension funds and that these domestic funds currently manage assets of €29.04bn.

In addition to this, on average, around 155,000 beneficiaries received a monthly supplementary pension of €417 in the 2024, which is paid 14 times annually instead of the typical 12 monthly payments.

The results also found that the long-term performance of the eight Austrian pension funds, which stands at 5.03 per cent, is “clearly” better than that of numerous other forms of investment.

Additionally, WKÖ said the investment strategy of the funds emphasised the importance of sustainability.

Commenting on this, WKÖ chairman, Andreas Zakostelsky, said: "As the largest private pension payer in Austria, the Austrian pension funds are a central component of the pension system. A pension fund pension is an important supplement to the standard of living in old age.”

In addition to this, WKÖ said the Abfertigung NEU provision funds also achieved a “very pleasing” result in the past financial year with an average performance of 4.93 per cent.

The Abfertigung NEU provision funds manage assets of €21.3bn for around 3.92 million beneficiaries. The focus of the provision funds’ investment strategy is on long-term stability.

In addition to the results, WKO highlighted research from the Austrian Institute of Economic Research, which suggested that supplementary pensions are particularly important for low-income earners.

In the study, two model cases for contributions to a pension fund were calculated – one was a percentage of 2.5 per cent of the gross wage and salary bill, and the other was a fixed indexed amount of €150 per year.

The research showed that an additional company contribution of 2.5 per cent can increase the total pension by 15 per cent to 19 per cent compared to the state pension (around €320 to €400 more for men and €160 to €200 more for women).

Even a moderate, indexed fixed amount of €150 per year raised the total pension by 1 per cent to 9 per cent compared to the state pension, which means up to €150 of supplementary pension 14 times a year.

Zakostelsky said that the current results of the pension and provident funds show that Austria needs a nationwide company pension scheme as a “strong” complement for the future of the pension system in Austria.

“A full expansion of the second pillar is long overdue in order to sustainably secure the standard of living in old age in the future," Zakostelsky continued.

"This year's top result in particular impressively illustrates the great potential that capital market-oriented investment holds for everyone, especially for low-income earners.

“Through this investment, all Austrians could benefit from international economic development."

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