The PKG-Novelle – Austria's latest reform of the law governing Pensionskassen – was the "best possible solution" within the existing system, but more reform is needed at the European level, according to Peter Braumüller, head of the insurance and Pensionskassen division at supervisor FMA.
Austria's Parliament approved the PKG-Novelle, which allows greater individual choice for members of Pensionskassen and a safety option for people close to retirement – last year. "With the reform, the most important steps were taken to iron out the biggest bumps within the system". Braumüller said.
He conceded that "some problems remained" but said those would have to be answered "on a political level". Braumüller was referring to old defined contribution contracts from the 1990s, for which a discount rate of around 6 per cent was applied, causing frequent cuts in pension benefits. He welcomed the greater choice for individuals introduced by the reform. He also said the safety pension ensured "the amount of money you got on the day of your retirement was less a matter of luck", as it offered a guaranteed minimum initial pension payout independent of the market situation on the day of retirement.
As for the IORP II Directive, he noted Austrian Pensionskassen would "not have to adjust much", considering the current draft excluding capital requirements. However, "over the long term", Braumüller said he would like to see some form of quantitative regulatory requirements for pension funds similar to those for insurers, "but not the same".
Full article (IPE registration required)
© IPE International Publishers Ltd.
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article