Austrian government approves contribution cuts

AUSTRIA - The Austrian council of ministers has approved its much-discussed plans for pension harmonisation, cutting contribution rates for civil servants.

Chancellor Wolfgang Schüssel of the coalition’s Volks Partei has announced that the government has agreed on the harmonisation after a period of consultation.

The new pension system spells the end of the fragmented system but includes only workers under 50 - rather than 55 as had been originally planned.

The harmonisation is to be implemented from January 2005 and from 2007 workers will be able to consult a pension account, pensionskonto.

At present the contribution rate for ‘beamte’ – referring to ‘established’ civil servants - ranges up to 12.55%, but it is going to be levelled with the rates of the general social insurance law, ASVG, 10.25%.

According to press reports, the cut has met with opposition from the civil servants’ trade union, Gewerkschaft Öffentlicher Dienst, or GoeD.

The press also says finance minister Martin Bartenstein, of the chancellor’s party, has made it clear that with the harmonisation, that ‘public employees’ would get their own pension scheme.

Speaking to IPE last month, Hermann Feiner of the GoeD said the plan to start a pension fund for civil servants was within the government’s broader scope of pension harmonisation.

Neither Feiner nor the finance or welfare ministries were available for comment.

So far, beamte have not yet been allowed to join the developing pension market, while a part of the public employees, with fewer privileges, has joined the Bundespensionskasse, or BPK.

The BPK has a capital value of about 30 million euros and about 40,000 members.

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