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The Austrian Pension System – How Recent Reforms Have Changed Fiscal Sustainability and Pension Benefits

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Author Info
Markus Knell () (Oesterreichische Nationalbank)
Walpurga Koehler-Toeglhofer () (Oesterreichische Nationalbank)
Doris Prammer () (Oesterreichische Nationalbank)

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Abstract

This article discusses the most recent pension reforms in Austria, which were mainly triggered by the need to alleviate the budgetary pressure stemming from the age structure of the Austrian population. Using synthetic indicators, derived from the government’s budget constraint, the paper assesses fiscal sustainability before and after the major pension reforms. Austria’s fiscal sustainability was clearly improved by the reforms. The two main factors behind this improvement are a projected increase in the average effective retirement age and a projected reduction in the generosity of the mandatory state pension system. Based on available data, the paper assesses the current and prospective level of Austrian public pension benefits and puts them into an international perspective. JEL classification: H55, H60, E62

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Publisher Info
Article provided by Oesterreichische Nationalbank (Austrian Central Bank) in its journal Monetary Policy and the Economy.

Volume (Year): (2006)
Issue (Month): 2 (August 2006)
Pages: 69-93
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Handle: RePEc:onb:oenbmp:y:2006:i:2:b:4

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Related research
Keywords: public pensions; social security; fiscal sustainability.;

Cited by:
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  1. Walter H. Fisher & Christian Keuschnigg, 2007. "Pension Reform and Labor Market Incentives," University of St. Gallen Department of Economics working paper series 2007 2007-13, Department of Economics, University of St. Gallen. [Downloadable!]
    Other versions:
  2. Roman Rabb, 2009. "Financial Incentives in the Austrian PAYG-Pension System: Micro-Estimation," International Studies Program Working Paper Series, at AYSPS, GSU paper0902, International Studies Program, Andrew Young School of Policy Studies, Georgia State University. [Downloadable!]
  3. Jaag, Christian / Keuschnigg, Christian / Keuschnigg, Mirela, 2007. "Pension Reform, Retirement and Life-Cycle Unemployment," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
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