Experts warn

The future of pensions is at stake!

Still at work in old age: a rare sight in Austria

(Bild: stock.adobe.com/Stephanie Eichler - stock.adobe.com)

Retirement too early, too high a proportion of part-time workers. All the alarm bells are ringing among economic experts when it comes to our pension system. Model pupil Scandinavia shows how it could be done.  

In the future government negotiations (see Politics) between the ÖVP, SPÖ and a possible third partner, pensions are also the biggest chunk of the ailing budget. This is why all the country's experts are asking themselves a particularly important question: what is the future of Austria's pension system?

In fact, the question of the future of pensions is one of the most pressing and should be at the top of everyone's agenda, regardless of who forms a government. Even if the very word "pension reform" seems to be taboo for the ÖVP and SPÖ, there will be no getting around a reform of the system.

We retire much earlier than our neighbors
"If we don't take countermeasures quickly, we will drive our pension system into the wall," says Doris Hummer, President of the Upper Austrian Chamber of Commerce. The lowest birth cohorts will no longer be able to absorb the departure of the baby boomer generation, she believes. The employment rate of 55 to 64-year-olds is also a cause for concern for the economy. In Austria, the figure is 57.3% - one of the lowest in the entire EU, where the average is 63.9%.

(Bild: Krone KREATIV/stock.adobe.com)

At 78%, Sweden is considered a model pupil, while the Netherlands and Germany also have a much higher employment rate for the older generation, with figures well above 70%. The reason for this low rate is the large number of early retirements in the country.

On average, men still retire at the age of 61.6 (instead of the statutory retirement age of 65), while women retire at the age of 60.9. According to Doris Hummer, raising the retirement age for men and women by just one month would save 200 million euros.

Part-time rates too high for long-term stabilization
Economists see another reason for the problems in balancing out the retirement of older workers in the part-time rate (see also chart above). The trend towards part-time work - also due to the relatively good pay compared to full-time work - is continuing. 30% make use of it, whereby the gap between men and women is striking. 9.3 percent of men work part-time, while 28.4 percent of childless women (aged 25 to 49) do not work full-time. The fact that 57.3 percent of women with children can only work part-time is not surprising.

Pension subsidies increase due to taxes
It is clear that all of this is a burden on our budget. Pension subsidies from taxes will increase from a quarter to almost a third of the state budget between 2022 and 2026. 29.5 billion euros currently flow into pensions, with 35.23 billion euros expected by 2027. This is at the expense of important areas. In 2027, "only" 9.97 billion will be available for families, 12.43 billion for education and 7.17 billion for science. Together, not even as much as will be spent on pensions.

"That can't run out," warns Hummer urgently. She therefore calls for early retirement only in the event of illness-related restrictions and numerous measures in the rehabilitation sector to keep people in employment for longer.