Partial Pension: Criticism Remains

For instance, the Senior Citizens' Council is pushing for a legal entitlement and the Federation of Austrian Industries sees a "statistical distortion" if partial pensioners are counted as employed. Additionally, the Federation finds the agreed sustainability mechanism not binding enough.

Working and Receiving a Pension

With the partial pension, assuming a corresponding parliamentary decision, it will be possible from next year to continue working on a reduced basis while simultaneously receiving a portion of the pension already accrued. For this, the phased retirement will be gradually restricted. In the future, it can only be used for three years instead of the previous five. The latter is explicitly not welcomed by the Austrian Trade Union Federation (ÖGB). Phased retirement has motivated many older employees to remain in the workforce longer.

A specific feature of the partial pension is the establishment of relatively broad corridors. Those who reduce their working hours by 25 to 40 percent receive an additional 25 percent of the amount accrued in the pension account up to that point as compensation. With a reduction in working hours by 41 to 60 percent, 50 percent of the previous credit is paid out in addition to the salary. Those who reduce by 61 to 75 percent, thus having only a comparatively low employment income, receive 75 percent of the entitlement acquired in the account.

Constitutional Service: Term Partial Pension Already Exists

This is where the Constitutional Service intervenes. For them, the question of the factual justification of the regulation arises. A review of the provision as well as an addition to the explanations is suggested. Additionally, the Constitutional Service points out that the term partial pension already exists legally. Therefore, it is suggested to come up with a different name for the new type of pension. Another concern is raised by the Public Service Union. They demand negotiations so that the partial pension can also be claimed under civil service law.

Also included in the amendment to the law is a sustainability mechanism. If the expenses for the pension system are not sufficiently curbed by 2030, the government is obliged to take measures. The range of options includes more difficult access to corridor pensions, contribution increases, a higher retirement age, lower adjustments, or a worsened account percentage, which is partly responsible for the amount of retirement benefits.

From the perspective of the Senior Citizens' Council, the target path outlined in the law is not realistic because it is far too low. Given that particularly large birth cohorts will be retiring in the coming years, the sustainability mechanism will likely be triggered by 2030 in any case.

The criticism from the Federation of Austrian Industries is quite different. The regulation merely represents budget monitoring for the pension insurance chapter. This is generally welcomed by the Federation, but a reporting system cannot replace a real mechanism. From the perspective of the Federation of Austrian Industries, the levers that could be adjusted are also too general and imprecisely stated. In contrast, the Austrian Trade Union Federation finds the mechanism too inflexible. If expenses are strictly capped, it could be difficult to respond to unexpected demographic or economic developments.

Detailed Criticism of Partial Pension

Regarding partial pensions, there is plenty of detailed criticism. Among other things, the Federation of Austrian Industries is displeased that a 38.5-hour workweek is used as the standard working time. While the Federation insists that partial pensions must be a matter of agreement, senior representatives are pushing for a legal entitlement. If an employer does not agree to a partial pension, it could quickly lead to termination, resulting in a full pension.

(APA/Red)

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