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Court threat over Austrian pension harmonisation

AUSTRIA – The opposition has threatened legal action in the latest twist to the harmonisation of the Austrian state pension system.

The move follows comments by economy minister Martin Bartenstein. He said this week that allowing workers with 45 years of contributions and workers with heavy jobs to retire before 65 years of age was “financially not feasible.”

Now, Norbert Darabos, general secretary of the opposition social democrats said he could report the intended pension harmonisation to the constitutional court to defend the right of workers with physically demanding jobs to retire early.

The centre-right government has put its plans to do away with the current fragmented pension system at the heart of its reform agenda.

This week the International Monetary Fund highlighted the importance of harmonising the system. It said: “Top priority should be given to the harmonization of the public and private sector pension schemes to bolster the credibility of the government and improve the fairness of the pension system.”

The reform, agreed on July 12 after 22 rounds of negotiations with social partners, envisages the creation of individual pension accounts and a harmonised base for contributions. It should be presented to parliament in autumn and is expected to become law by January 2005.

Bartenstein maintained that exceptions for physical work would cost 172 million euros a year, an argument Darabos described as “an excuse”. He said the minister’s argument that only five percent of workers were employed in hard work was “cynical”.

"Hard-work is defined not in terms of percentage but in terms of the kind of task performed,” Darabos said.

He argued the system was not as weak as the ruling coalition’s People Party, OeVP, had suggested, pointing out that the intended new system too envisages different contribution rates.

According to the government plans, standard contributions would amount to 22.8% of gross wages, but farmers and self-employed workers should pay respectively 15 % and 17.5%.

“It is therefore no genuine harmonization of the pensions,” Darabos was quoted as saying in an article published on his party’s website.

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