Österreich | Max-Planck-Institut für Sozialrecht und Sozialpolitik - MPISOC

The Austrian Old Age Security System in 2020

By Susanne Auer-Mayer, Vienna University of Economics and Business

In Austria, a pension insurance law was created for the first time in 1906 for white-collar workers. With the General Social Security Act of 1955, the social insurance, and in this context also the statutory old age pension insurance, was unified and reorganised to protect all employees (and some equally treated groups). Since 1998, the majority of self-employed persons including most liberal professionals have also been subject to mandatory insurance. The pension reforms of 2003 and 2004 brought about fundamental changes in the statutory pension law. With the Pension Harmonisation Act 2004, the General Pension Act was enacted, which created uniform personal pension accounts for all employees, most of the self-employed and farmers, and extended the assessment basis for pension benefits to the entire insurance period. Finally, yet importantly, privileges of civil servants were abolished by harmonising pension regulations with those for employees in the private sector. As of now, ‘standard protection’ in old age is achieved primarily by mandatory insurance in statutory old age pension schemes. Occupational and private pension plans are usually not mandatory and only used to ‘top-up’ public benefits. However, they will probably gain in importance, as current reforms are expected to result in lower public benefits of future retirees. An income-tested pension supplement shall guarantee a ‘minimum’ pension level for persons who fulfil all insurance requirements. For all other elderly persons with insufficient financial means general social assistance measures function as a last resort.


Standard Protection in Old Age 

The majority of the Austrian workforce is mandatorily insured within the statutory old age pension insurance (gesetzliche Pensionsversicherung). The public pension insurance is pay-as-you-go (PAYG)-financed with benefits being linked to the amount and duration of contributions paid throughout a person's career. The General Pension Act (Allgemeines Pensionsgesetz) provides uniform regulations on the qualifying conditions and the calculation of pension benefits for employees (incl. ‘Vertragsbedienstete’; i.e. employees in the public sector, appointed under civil law), self-employed persons (incl. most liberal professions) and farmers. However, there are still various specific legal bases for the insurance of these groups, not only defining the insured persons and the amount of contributions to be paid, but also determining the competent insurance institution. In this respect, it can be argued that despite the recent harmonisation strategies different pension schemes still exist depending on the type of employment, namely the statutory pension scheme for employees and equally treated persons (Pensionsversicherung nach dem Allgemeinen Sozialversicherungsgesetz), the statutory pension scheme for self-employed persons (Pensionsversicherung nach dem Gewerblichen Sozialversicherungsgesetz oder dem Freiberuflichen-Sozialversicherungsgesetz), and the statutory pension scheme for farmers (Pensionsversicherung nach dem Bauern-Sozialversicherungsgesetz).

The bar associations are the only chambers of the liberal professions that have made use of the possibility to opt out of the statutory pension scheme for self-employed persons. Therefore, insurance for attorneys is organised in a separate pension scheme, the old age pension scheme for attorneys (Berufsständische Versorgung der Rechtsanwälte), which is administered by the chambers’ pension funds (Versorgungseinrichtungen) according to their own statutes (Satzung). Furthermore, there exists a special statutory old age pension scheme for notaries (Notarversorgung).

The financial protection of civil servants, who are generally appointed under public law, is organised in the autonomous civil servants’ old age pension scheme (Beamtenversorgung)It is largely tax-financed and paid out of the general budget, although civil servants have to contribute as well. As of now, the scheme is still regulated by the Pension Act of 1965 (Pensionsgesetz 1965), but pension rights of civil servants born after 1975 or appointed after 2004 are mainly determined by the regulations of the General Pension Act and the General Social Security Act.


State-regulated occupational pension schemes (betriebliche Altersvorsorge) are, for the most part, fully funded and provided by the employer. In general, participation of employers and employees is voluntary. An exception applies to the supplementary pension scheme for the public service (Zusatzversorgung des öffentlichen Dienstes). The federal government is legally obliged as an employer to pay contributions to a pension institution (Pensionskasse; i.e. a special type of insurance company) for civil servants and ‘Vertragsbedienstete’. Regulations to secure employees' claims to occupational pensions were created with the 1990 Company Pensions Act. Commonly, the choice of the organisational form of pension plans depends on agreements, often at company level, whereby collective agreements are very important. Pension plans are either implemented internally via the employer in the form of book reserves (direkte Leistungszusage) or externally in the form of contributions to a pension institution (Pensionskasse) or by concluding a collective insurance (betriebliche Kollektivversicherung, i.e. contributions to a life insurance company) or life insurances in favour of the employees. In general, employees are entitled to contribute up to the level of contributions paid by their employer (or up to EUR 1,000/year if contributions of the latter are lower). Contributions to occupational pension plans are incentivised by tax refunds and exemptions from social security contributions, while pension payments that were originally financed by the employee are tax-privileged or even completely tax-free.

Another possibility to ‘top up’ public pension benefits is via private pension insurance such as the premium-aided pension savings schemes (prämienbegünstigte Zukunftsvorsorge). The state supports participation in these schemes by granting (lump sum) tax refunds on contribution payments and tax exemptions for pension payments as long as pension plans fulfil all necessary requirements.


The equalisation supplement (Ausgleichszulage) forms part of the statutory pension scheme, but is financed by the federal government. The supplement guarantees a minimum pension income for persons entitled to pension payments. It is income-tested and granted if the person’s (pension) income and the income of the spouse/registered partner fall below a certain reference level (Ausgleichszulagenrichtsatz), also considering the household’s composition. If the person has been insured for at least 30/40 years, an additional supplement, the so-called pension bonus (Pensionsbonus) – or equalisation supplement bonus (Ausgleichszulagenbonus) if the income is below the reference level of the equalisation supplement – is granted via the application of a higher minimum reference level. Elderly people with insufficient financial means who do not qualify for the equalisation supplement only have the possibility to apply for general social assistance (Sozialhilfe). The latter is strictly means-tested and takes not only income and assets of the applicant into account, but also the income of the spouse/cohabiting civil partner and (maintenance) claims against other persons (with only a few exceptions).

Full Report:
Schneider S. M., Petrova T., Becker U. (eds.), Pension Maps: Visualising the Institutional Structure of Old Age Security in Europe and Beyond, 2nd ed., Munich: MPISOC, 2021.

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