The Austrian chamber for employees’ welfare, the AK, has demanded the government’s reduction of the minimum interest rate for pension funds to be withdrawn, saying it is an “unconstitutional attack on personal property”.
The government and owners of pension funds were playing a “dangerous game” which would lead to 20% decline in pensions for about 300,000 insured people in the long term, the AK added.
The AK has based its appeal on a legal report of the institute for state and administrative law of the University of Vienna saying that the change would infringe personal property rights. “This report confirms our criticism. We will now put it the_report at every party’s disposal,” said AK director Werner Muhm.
Muhm said pension capital should be returned with a minimum interest charge of approximately 1.5% over a period of five years, as established by the Pensionskassen Law of 1990, which was changed last year as the government embarked on pension reform.
He stressed he did not want to “bring down” the Pensionskassen. “These institutions are, in their original form, a sensible addition to the state pension system,” he said.
“The government and the Pensionskassen owners are however playing a dangerous game for workers. They should take 100% of risks to clean themselves up.”
The AK also said the government was talking about the introduction of an opt-out from the minimum interest guarantee as an option for pension funds.
The Chancellery told IPE it was not yet aware of such a plan, but added that chancellor Wolfgang Schüssel has presented an “agreement paper” on pension harmonisation, one of the aspects of the pension reform, to the social ministry for consideration.