AUSTRIA - Andreas Zakostelsky, head of Valida, is convinced that a mandatory second pillar would increase participation in Austrian occupational pension funds from its current level of 20% to 80% by 2020.
The reputation of Austrian pensionskassen, which are predominantly pure defined contribution schemes, have suffered during the financial crisis with downward pressures on returns. (see earlier IPE-article: Austria: Domestic headwinds buffet Pensionskassen)
Despite negative sentiments from other commentators, Zakostelsky has suggested introducing a mandatory second pillar to ensure sufficient retirement provision for all - a demand which his predecessor had thought was "too early" for Austria. (see earlier IPE-story: Too early for mandatory second pillar - ÖPAG)
"While there is currently already a moral obligation to introduce occupational pensions as part of a company's responsibility towards its staff, there is also an argument for creating a legally mandatory second pillar," Zakostelsky said to IPE.
"Politicians have the responsibility not to leave the people in uncertainty and the main goal has to be to prevent old-age poverty," he pointed out.
Zakostelsky added that it will be the growing number of pensioners whose purchase power will help the economy.
But he stressed that a mandatory second pillar would have to offer "a lot of flexibility" - for example, when it comes to flexible contributions or differences in pension promises for different members of staff.
This would ensure that as much money as possible can be put aside for retirement.
"Politicians have to push for an increase in awareness among the public that a supplementary second pillar is necessary, as the state pension system will become less and less effective over time," he pointed out.