AUSTRIA - Civil servants born after 1954 will be joining the existing Bundespensionskasse BPK,  government and unions agreed yesterday.

The outgoing government coalition of Social Democrats and and the conservative People's Party has now finalised a second pillar arrangement for civil servants, after several years of negotiations and a recommendation by the audit court. (See earlier IPE article: Austrian civil servants to get Pensionskasse)

Around 150,000 federal employees will retroactively join the BPK from 1 January 2008, a spokesman for the finance ministry confirmed to IPE.

The BPK currently has around 43,000 members all of which federal employees without tenure, so called "Vertragsbedienstete" (contract employees).

The BPK is going to become the largest pension fund in Austria by members once the new recruits are added, even overtaking the VBV which currently has around 180,000 members.

The government will initially contribute 0.75% of the salary before taxes for each civil servant to the fund, with the contribution set to rise in future following further negotiations.

Civil servants can choose whether or not to contribute themselves but according to Austrian pensionskassen law they cannot contribute more than the employer

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