Austria's EUR295m Verbund Pensionskasse has abandoned its search for a specialist manager and decided to merge itself with a multi-employer fund.
The fund had been considering a switch from balanced to specialist management. A spokesman for Verbund said the pension scheme had instead decided to “make a merger with another Austrian pension fund” in order to “concentrate all our business on our core business.”
Verbund is a corporate pension fund and as such is only allowed to service its own employee members. The other main type of pension funds in Austria are multi-employer Pensionkassen which are not limited to contributions from the employees of one company and generally have strong links with insurance companies.
Pensionkassen in Austria account for EUR8bn under management, with 300,000 members, yet just 11% of the private sector belong to them - although this is expected to rise. The largest multi-employer is OPEC, worth nearly EUR4.5bn, while the second largest is Vereinigte with EUR1.5bn. Since August, Pensionkassen investment rules have been relaxed with equity quotas up from 40% to 50%.
The Verbund spokesman said a shortlist of all seven of the country’s multi-employer funds is being considered but declined to discuss details. Austrian law dictates that a merger such as Verbund is planning can only take place with another Austrian-domiciled pension scheme.
Verbund Pensionskasse’s investment adviser is St Gallen-based Complementa.
A decision will be taken in September on the choice of Pensionkassen with which to merge.
The Pensions and Lifetime Savings Association (PLSA) is in the process of convening an industry-wide group to take forward the work of the Institutional Disclosure Working Group (IDWG).
The Transfers and Re-registration Industry Group (TRIG) has given its support to an initiative which aims to complete occupational pension transfers within three weeks.
Scottish Widows has completed a bulk annuity deal for the Hitachi UK Limited Pension Scheme.