Austria

In 2004 Austria modified its social security system in order to align the provisions of its pay-as-you-go pension systems for federal civil servants, farmers and self-employed persons with those for most workers in the private sector. In addition to reducing inequities between future pensioners, the government expected such reform to enhance labor mobility by removing distortions generated by different contribution rates and benefit levels across the various systems that existed.

The full retirement age for men is 65, but is flexible with a "corridor" between the ages of 62 and 68. During this “corridor” period workers may retire with an annual 4.2% reduction in their pension benefit for each year under age 65 or a 4.2% increase in the benefit for each year worked after age 65. Until 2019, women are allowed to retire at age 55. Between 2019 and 2033 the retirement age will be raised gradually to equal that for men. Additionally, until 2015 a current system of long-service pension provision for heavy laborers (Hacklerregelung) will apply, to allow men with 45 years of coverage and women with 40 to remain eligible to retire without penalty at the ages of 60 and 55, respectively.
Workers in occupations regarded as arduous or dangerous may claim 3 months of early retirement for each year after a minimum of 15 years of employment, with an annual deduction of 2.1%, or one-half the rate applied to other categories of workers who choose early retirement.
In general, the contribution rate is set at 22.8% (12.55% from the employer and 10.25% from the employee. However, in case of self employed persons contributions range between 16.25% and 20% of covered earnings and farmers contribute 15% of earnings. 45 years of contributions are required to receive a pension worth up to 80 percent of wages.
Article with courtesy of Social Security Online
Sources: Social Security Programs Throughout the World: Europe, 2010; European Industrial Relations Observatory On-line (eironline; http://www.eiro.eurofound.eu.int), September 2004; APA News Service, October 12 and December 2, 2004; International Benefits Information Service (IBIS), October and December 2004;http://www.IPE.com (Web extension of Investment & Pensions Europe), November 24, 2004; and Pensions International, January 2005.

 

 
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