AUSTRIA - The government has endorsed a proposal by the court of auditors to set up a Pensionskasse for up to 100,000 federal civil servants.

A report from the court of auditors, the Rechnungshof, urged the authorities to extend the supplementary pension provision to all federal civil servants. Currently the federal Pensionskasse BPK provides pensions for some civil servants without tenure but not for those with tenure.

A government statement said that it supported the idea.

In total, the federal government employs just over 133,000 civil servants. The Rechnungshof wants to see a second-pillar pension arrangement for all those born after 1955 as outlined in amendments to the pension law two years ago.

In 2005, just over 26% of federal servants were aged over 50, leaving just under 100,000 who could benefit should a supplementary pension scheme be set up.

The government wants to go a step further and include civil servants in the new severance pay arrangement. Under the so-called Abfertigung Neu, severance pay is invested in specially established funds that are mostly run by the same insurance companies as Pensionskassen.

Two years ago, the government changed the pension law for civil servants and bring it into line with that for private employees. All first-pillar pensions for people born after 1955 are now calculated on a career-average rather than a final-salary basis.

The Rechnungshof report noted that in total the reform of the pension law was "positive". It added that: "The reform in its final stages will contribute substantially to financing civil servants' pensions."

It also recommended that several of Austria's provinces set up Pensionskassen for their local government employees.