Pension reform is gaining momentum in Austria, although public awareness of the government’s plans remains low.
In April, the government announced the most comprehensive reform of Austria’s occupational pension system since the introduction of pension funds (Pensionskassen) in 1990.
The two main elements of the reform are the general pension fund contract (Generalpensionskassenvertrag), which would allow employees to transfer entitlements held in provident funds (Vorsorgekassen) into pension funds, and the establishment of a pension investment pool (Vorsorge-Veranlagungsgemeinschaft) within provident funds for long-term investment after retirement and without costly guarantees, with the aim of achieving higher returns.
The severance pay system (Abfertigung Neu) in provident funds would remain in place, with guarantees on paid-in capital, giving workers a choice between the two options.
A survey published yesterday by market research firm Unique Research on behalf of Austria’s association for pension and provident funds, Fachverband der Pensions- und Vorsorgekassen, found that 68% of workers expect to need an occupational pension in addition to the state pension.
At the same time, 35% of those surveyed do not have private supplementary insurance or an occupational pension contract, while only 25% of employees are entitled to a benefit from a pension fund, according to figures published by the Financial Market Authority (FMA).
Fachverband chair Andreas Zakostelsky told IPE that, given these figures, the potential of the reform is “immense”.
“The expansion of occupational pension provision is viewed positively far more often than negatively. Many people see the need for additional financial security and are open to new options regarding supplementary pensions and the severance pay system,” Zakostelsky added.
A large number of workers still lack access to supplementary pensions or have not yet received a concrete offer, he said.
Scientific director and co-owner of Unique Research Peter Hajek pointed to up to 450,000 people who “could potentially be mobilised” in the short term to expand occupational pensions.
“It is impossible to estimate the potential for the medium to long term,” he added.
Educational campaign needed
The plan to reform the second-pillar system is gaining momentum not only from a public perspective, but also politically and economically.
“Politically, because the government is taking a major step toward modernising the pension system through this reform. Economically, because pension funds demonstrate that the system works in the long term: performance stood at 4.83% in the first half of 2026, with a long-term annual performance of 5.02% since 1991,” Zakostelsky noted.
The momentum is driven by many workers feeling it will be difficult to maintain their standard of living on state pensions in the future, particularly those under 30 and those aged 30 to 50, Hajek said.
The pension association’s chair underlined that now the “crucial next step” is translating support for the change into concrete action by engaging companies, informing employees and more firmly establishing supplementary pensions through pension funds.
Only 14% of people surveyed by Unique Research are aware that the government plans a major reform this year. Despite the potential, only 45% said they would consider continuing to invest upon retirement.
“This points to a clear mandate: the reform must be explained clearly, introduced into workplaces, and made practically accessible to employees,” Zakostelsky said.
