Austrian banking employee and employer representatives recently came to an agreement about wage increases for 2025. They have also agreed to an increase in Pensionskassen contributions within the compensation package. For years, the minimum rate for employer pension contributions under the agreement has been set at 2.70%, but now an increase by 0.15 percentage points is being negotiated.
“This is remarkable and important,” Gerald Moritz, founder of independent benefit consultancy Moritz Consulting, told IPE. “It shows that supplementary pensions are gaining in importance in the mindset of employers and employees.”
The banking sector is one of the few industries in Austria to have a second-pillar provision in its collective bargaining agreements (Kollektivverträge). This means that banks have to offer some form of second-pillar package.
In the most recent negotiations, the raised employer Pensionskassen contributions were accompanied by a 3% wage increase.
“There has to be more of a shift towards a total compensation view,” said Moritz, adding: “Currently, companies have to make cuts, but they also want to set themselves apart from the competition – and that is where supplementary pensions are coming in.”
He confirmed that his consultancy is getting requests from companies that so far had never thought about offering something other than a good wage level.
“They are now considering benefit packages, sometimes including additional health insurance – or supplementary pensions,” he said.
“What it needs now is a better financial education and information on pensions,” Moritz said.
He noted that in countries such as the Baltics, supplementary pensions are not part of their “historical DNA”. He added: “There, the providers introduced really good e-learning platforms to inform people about the second pillar.”
Rediscovering the second pillar
Fachverband der Pensions- und Vorsorgekassen, Austria’s association for pension and provident funds, has welcomed the increase to pension contributions under the collective agreement for the banking sector.
“This could set an example for other industries,” Andreas Zakostelsky, chair of the Fachverband, said in a statement sent to IPE.
“More and more people realise that an addition to the state pension is necessary,” Moritz said, stressing that “it is not about one pillar or the other. It needs an open discussion about how all three pillars can be set up to avoid old-age poverty”.
Moritz stated: “Considering demographic developments should come before considering the economy – changing demographics are shaping the economic development.”
He said he hopes this changed mindset towards supplementary pensions will also reach the new coalition government – of the conservative ÖVP, the social-democratic SPÖ and the neo-liberal Neos, that assumed power in February – and lead to real change.
One of the politicians’ main worries is a major budget deficit, which has brought Austria before the European authorities. To fill the gap, a different approach to pensions could be considered: over the past few years, several billion euros had to be poured into the state’s first-pillar pension system as demographic trends did not cover the increasing number of pensioners.
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