How secure are our pensions?
Experts discussed the security of our pensions as part of the “WU matters. WU talks” discussion series.
As part of “WU matters. WU talks,” Christoph Badelt, President of the Fiscal Council; Gabriel Felbermayr, Director of the Austrian Institute of Economic Research; Markus Knell, economist at the Austrian National Bank; Christine Mayrhuber, member of the Pension Security Commission; and Andrea Weber, labor market economist and professor of economics at Central European University, discussed the future sustainability of the Austrian pension system.
“Demographics are not on our side.”
With this statement, moderator Marina Delcheva opened the discussion. The debate on pensions often focuses on financial sustainability, age limits, and pension levels. Today, professional careers are more diverse, more frequently interrupted, and often shorter—and are also strongly influenced by gender.
“Contribution revenues are insufficient”
Christine Mayrhuber pointed out that contribution revenues in Austria are insufficient to cover pension expenditures. At the same time, Austria is among the countries with high pension promises—yet these promises are unfunded, meaning they are financed through taxes and future budgets.
In addition, the declining labor force participation rate among those under 25 poses an additional challenge. A higher retirement age could therefore become relevant for younger generations.
“The retirement age should be linked to rising life expectancy”
Markus Knell emphasized that the retirement age must be linked to rising life expectancy. On the one hand, this is a well-known demand and, from an actuarial perspective, a fair one; however, the question arises as to how this can be implemented. After all, differences in income and life expectancy persist. Furthermore, it will never be possible to eliminate all injustices.
In this context, it also becomes relevant whether different occupational groups should be treated differently. For example, should a construction worker retire earlier than a university professor?
Pension Gap Higher Than Gender Pay Gap
Women in Austria receive, on average, 35% less pension than men. Reasons for this include high rates of part-time work (approx. 50%) and career interruptions. Single female retirees are particularly hard-hit by poverty in this regard. “This problem cannot be solved simply by raising the retirement age,” says Andrea Weber. Furthermore, it is often forgotten that unpaid work, such as household chores or childcare, is not taken into account in the pension system.
“Students should give politicians a good kick […]”
“Reforms are needed,” emphasized Christoph Badelt. Otherwise, we face growing social problems—not only in the pension system, but also in healthcare, long-term care, and other areas. “It’s about education,” said Christine Mayrhuber. Combined with choosing a field that offers high earnings, this forms the foundation for stable retirement planning.
A clear recommendation: Young people need to start thinking more seriously about retirement planning, according to Andrea Weber. This begins with the choice of career, as a successful career automatically correlates with a good pension. However, it is important to note that not everyone has the same opportunities to achieve this. Here, too, women are at a significant disadvantage.
Watch the full discussion here:
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