Austrian bodies call for 2nd pillar tax incentives
AUSTRIA - The majority of companies would like to see more tax incentives to warrant the offering of an occupational pension scheme, a study by the Austrian economic research institute Wifo has found.
According to the survey conducted in April 2008, tax issues alongside the simplification of products and pricing, as well as flexibility in contributions, were the three main fields in which the 870 companies interviewed want to see amendments.
When asked why they had not introduced an occupational pension scheme, companies most often noted that their employers preferred pay rises to pension plan contributions.
Costs as well as the prospect of money being tied up for a long time were also reasons cited against the introduction of a pension plan.
Thomas Url, researcher at Wifo, noted large parts of the hotel and restaurant industries, as well as construction companies, did not need to keep employees over the longer term and offer additional social benefits because many employees were seasonal workers.
In total, around one-fourth of all Austrian companies have introduced a pension plan for their staff which amounts to 865,000 employees, and those pension benefits either paid direct by the company via an insurance solution or paid nto a pensionskassen - a move enjoyed by 620,000 members.
Growth of pensionskassen is set to be ensured over the next few years, noted Wifo, as federal civil servants have been signed to a funded pension system. (See earlier IPE article: 150,000 to join BPK)
In addition, the city of Vienna has started transferring its first civil servants over to a joint pensionskasse between ÖPAG and VBV, which formed a consortium and won a tender from the Viennese city government at the end of last year.
The study, which was financially supported by FVPK, the Austrian pensionskassen association as well as the Austrian National Bank OeNB, also found that since 2000, when the survey was last carried out, the number of companies with an occupational pension scheme had almost doubled.
Over the same period, however, the average contribution level has increased only a fraction from 0.9% to 1.3%.
On average, the benefits received from a company pension scheme make up just under 12% of people's retirement income.
That said, the researchers pointed out that there was a huge difference between some old contracts for executives and newer contracts for all employees of a company.
And looking at the current issue of pension cuts suffered by some pensioners last year, Url argued the state was as much to blame as those companies who signed the contracts with too high discount rates of up to 6.5% in the 1990s, as the financial supervisor FMA had agreed to these contracts. (See earlier IPE story: Austrian pension funds report 7% return)