{"id":17448,"date":"2025-11-07T11:02:48","date_gmt":"2025-11-07T10:02:48","guid":{"rendered":"https:\/\/blog.wu.ac.at\/?p=17448"},"modified":"2025-11-17T16:27:07","modified_gmt":"2025-11-17T15:27:07","slug":"pension-at-age-75","status":"publish","type":"post","link":"https:\/\/blog.wu.ac.at\/en\/2025\/11\/pension-at-age-75\/","title":{"rendered":"Retirement at 75? A necessity or a social injustice?"},"content":{"rendered":"

On November 5, 2025, the Austrian pension system took center stage at \u201cWU matters. WU talks.\u201d Following a keynote speech by Martin Halla (WU), Hanno Lorenz (Agenda Austria) and Barbara Schuster (Momentum Institute) engaged in a panel discussion on the challenges and possible reforms ahead. The event was moderated by Karin Heitzmann.<\/em><\/p>\n

The problems are well known but remain politically unresolved<\/h2>\n

In his keynote, WU Professor Martin Halla<\/strong> outlined the fundamentals of Austria\u2019s pension system. Before the introduction of the public pension scheme, families provided the main source of financial security in old age. Today, this role is performed by the state. \u201cDuring our working lives, we set aside part of our income, and the state later returns it to us,\u201d Halla explained. Austria\u2019s pension system operates on the principle of an intergenerational contract: The young working generations pay contributions to the pension fund, financing the pensions of older generations. When today\u2019s workers retire, their pensions will, in turn, be funded by the contributions of those who follow. The core issue, according to Halla, is clear:<\/p>\n

\u201eWe\u2019re living longer but not retiring later, and we\u2019re having fewer children.\u201c<\/em><\/p><\/blockquote>\n

This creates a growing funding gap. Even today, around a quarter of Austria\u2019s federal budget is already allocated to the public pension system, which was originally intended to be self-financing. But it isn\u2019t.<\/p>\n

Closing the funding gap \u2013 but how?<\/h2>\n

In theory, there are several ways to ease the pressure on the system. Migration, however, is not a sustainable solution, Halla argued. He therefore advocates raising the statutory retirement age. Hanno Lorenz<\/strong> from the think tank Agenda Austria<\/strong> agreed, calling such a reform \u201clong overdue.\u201d Lorenz noted that while increasing contributions would be an option, these are already very high. Cutting pension benefits would be even less popular politically. Given limited prospects for higher fertility or productivity, raising the retirement age remains the most realistic lever. \u201cIt\u2019s actually the most socially responsible option,\u201d Lorenz argued, \u201cbecause it means each person works a little longer, yet the overall system benefits enormously.\u201d As a first step, he proposed increasing the retirement age to 67, and subsequently linking it to life expectancy \u2013 a model that is already used in Denmark, where the retirement age is set to rise to 74 in the long term. This, Lorenz suggested, could provide greater certainty for planning ahead and reduce the burden on younger generations.<\/p>\n

Calls for companies and employers to do their share<\/h2>\n

Barbara Schuster<\/strong> from the Momentum Institute<\/strong> strongly disagreed with this perspective. Raising the retirement age across the board, she argued, would primarily disadvantage low-income earners and people in physically or mentally demanding jobs, who already tend to have shorter life expectancies anyway. Even now, only around one in three people transition directly from employment into retirement. Linking the retirement age to average life expectancy, Schuster warned, would mean that many people would not live to see their retirement. As Schuster put it,<\/p>\n

A higher retirement age would mean that people aren\u2019t going from work to retirement \u2013 they\u2019d be going from work to their graves.<\/p><\/blockquote>\n

Austria\u2019s pension system, designed around uninterrupted full-time employment, is already unfair as it is, according to Schuster. The gender pension gap currently stands at around 40 percent: \u201cOn average, women receive \u20ac1,000 less in pension payments than men,\u201d Schuster noted. To make the system fairer and its financing mechanisms more sustainable, she called for targeted labor market measures, stronger corporate responsibility, and fairer taxation of wealth and inheritances. \u201cWe need to hold companies and employers more accountable for helping to raise the actual<\/em> retirement age,\u201d she said. Possible measures include in-company training programs or job guarantees to reduce unemployment among older workers.<\/p>\n

Lorenz agreed that improving working conditions is essential \u2013 but as a complementary measure to pension reforms, not as a substitute. In conclusion, Professor Karin Heitzmann<\/strong>, who moderated the discussion, reminded the audience that when looking at the pension system, the question of how to fund it is not the only aspect that needs to be considered because the pension system serves a number of different purposes: \u201cBeyond the question of funding, our pension system also fulfils important social policy objectives \u2013 such as preventing poverty in old age,\u201d Heitzmann pointed out.<\/p>\n

Watch the entire discussion (in German):<\/h2>\n