Originally, at least 40% of the capital had to be invested in stocks. With the 2009 Tax Amendment Act, the stock allocation was lowered to 30%, and for new policies, this allocation is reduced in two steps – depending on the policyholder’s age – (life-cycle model):
Age:
up to 45 = 30%
45 to 55 = 25%
55 and older = 15%
Investment requirements
Investments must be made in stocks that are primarily listed on a regulated market of a stock exchange located in a member state of the European Union or in a country of the European Economic Area. The market capitalization of such a stock exchange must not exceed 40% of the gross domestic product over a period of several years (example: Vienna Stock Exchange).
The following rule applies to new contracts entered into on or after 1 August 2013:
The equity allocation for individuals under the age of 50 ranges from 15% to 60%. For individuals over the age of 50, the range is from 5% to 50%. In addition, at least 60% of the shares held must meet the above investment requirement. The remaining portion of the equity holdings may be invested on other stock exchanges.
Individuals who entered into a retirement savings contract before August 1, 2013, may switch to the new regulations after the minimum term of their current contract has expired.
Strong interest in premium-subsidized "Zukunftsvorsorge"
The combination of premium subsidies, tax incentives, and a capital guarantee has led to massive demand since the launch of the "Zukunftsvorsorge" plan. With a total of 281,138 contracts signed in its very first year (2003), the "Zukunftsvorsorge" plan has already become one of the most popular forms of retirement planning among Austrians. By the end of 2006, providers were managing assets totaling nearly 1.8 billion euros, and the one-millionth contract was signed in the first half of 2007. By the end of 2011, the number of contracts had already exceeded 1.6 million, and assets under management stood at approximately 5.7 billion euros.
