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Austrian court upholds higher cost of pension plan shift for UniCredit Austria

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Austrian court upholds higher cost of pension plan shift for UniCredit Austria

The Constitutional Court of Austria upheld legislation requiring UniCredit Bank Austria AG to use a higher rate to transfer its employees to a state pension scheme, Reuters reported.

UniCredit Bank had wanted to pay 7% of each employee's last salary before the switch, multiplied by the length of service, the report noted. However, Austria passed a law requiring the bank to apply a more commonly used 22.8% rate.

UniCredit SpA unit plans to move some 3,300 employees to the state-sponsored pension scheme as a cost-saving measure. The bank has provisioned €790 million to handle the cost of making the transfer at the 22.8% rate, Reuters noted.