Experts See Pension System Under Reform Pressure

In the forum "On the Future of the Pension System," initiated by Federal Council President Andrea Eder-Gitschthaler (ÖVP), the need to align the retirement age with increasing life expectancy was highlighted, as well as the "pension gap" between women and men.

Longer Life Expectancy Poses Challenges to the Pension System

Labor and social law expert Rudolf Mosler (Paris Lodron University Salzburg) stated in his contribution that the pension issue is one of the "most important topics in social policy." In view of longer life expectancy, one could either increase contributions or the state subsidy to pensions, or extend employment - "or find a combination" of these. It is about deciding where to place the emphasis and politically creating a balance in this matter.

Retirement Age Relatively Low in International Comparison

In comparison with the OECD and EU, pensions are relatively high when considering the net replacement rate. Also, unlike in some other comparable countries, Austria has the compensatory allowance, which ensures a minimum level of security. The contribution rate in Austria is "actually stable," according to Mosler. The federal contribution to pensions is high in international comparison, he emphasized, while the retirement age is relatively low.

Reforms Have Taken Place – But Further Steps Are Necessary

Claims that no reforms of the pension system are taking place in Austria are incorrect, said the expert. In recent decades, early retirements have been restricted several times, and the system was switched "a little over 20 years ago" to "lifetime accounting" instead of using the best income years as a basis for calculation. This has brought "massive benefit cuts."

He also pointed to the gradual alignment of the retirement age for women with that of men starting in 2024, as well as the introduction of the principle of rehabilitation before retirement. The current federal government also has reforms planned, he noted, including the increase in the necessary insurance years for corridor retirement, the planned introduction of partial retirement, and other reform plans.

Gender Justice in Focus

For the pension system, longer employment in itself and as much full employment as possible are important. This requires active labor market policies, more education and training, as well as an improvement in working conditions for older people and closing the gender gap.

The deputy WIFO director Christine Mayrhuber focused on the inequalities between women and men and the risk of poverty for women. The highest risk of poverty and social exclusion is faced by women living alone over the age of 65, at 33 percent, she said. This is only topped by single-parent households at 43 percent.

Wifo Expert Sees Part-Time Work - Also - Positively

In contrast to the frequent criticism of too much part-time work, Mayrhuber emphasized that it has been a "very good instrument" to ensure more flexibility. "Of course, it is better to be employed part-time than not to be employed at all." Nowadays, only ten percent of women no longer have their own pension entitlement, she looked back to the past when this was higher. "I prefer to have a small pension than no pension at all," she said. She sees part-time work as "ambivalent," but "quite positive."

She misses the political debate about what constitutes a sustainable system: "How much insurance should there be, where do we outsource the social components?" Mayrhuber asked.

EcoAustria director Monika Köppl-Turyna said on the latter topic that there is a correlation between social status and life expectancy, although no causality can be established here. If one wants to balance social inequalities, "then this is not to be regulated in the pension system (because it is an insurance system, note), but in the social system." The economist sees the decisive lever in linking the retirement age to life expectancy - and referred to international examples of pension automatics, such as in Sweden.

(APA/Red)

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