Company pension provision: This important change is coming to you

DELIVERY MAN: The new clearance service has been available in Austria for over 20 years. What is the basis of the concept?

Adriana Mandl: According to the law, the employer must conclude an accession agreement with a pension fund. In companies with a works council, this is determined by a works agreement between the employer and the works council. In companies without a works council, the employer chooses a fund himself. These are essentially similar and are subject to strict financial market supervision.

How many providers can you choose from?

There are currently eight pension funds. The GPA (union, note) has a very good brochure that shows how individual pension funds have performed over the past 20 years. It rarely happens, but sometimes employees have the luxury of being able to suggest a retirement fund. Then we recommend taking a look at this brochure and deciding at your own discretion.

When you have multiple employers over the course of your career, it is difficult to keep track of everything. Letters from different providers regularly arrive with the current account balance.

Each pension fund usually sends a letter once a year, providing ongoing information about the development of the assets. Otherwise you will be notified if an employment relationship has ended or there is a claim to disposal. But it’s a question we get asked again and again. It’s easy to lose track of all the paper flooding.

How do you get an overview?

It’s very easy to get the so-called statement on company pension plans from the ÖGK. This can be done at any service point or online via “MeinSV”, where you log in with your ID Austria. The data statement is like a bank statement. It provides information about the periods over which the severance payment was paid and into which pension funds.

Contributions can be combined. Do you recommend this?

You can combine them and transfer them to your current employer’s pension fund. The prerequisite is that contributions have been suspended for at least three years without contributions. This works with an application and a copy of your photo ID to the current pension fund. There is also a sample letter on our homepage. It’s just clearer and you don’t have to worry about anything getting lost or forgotten.

A reform of company pension schemes is imminent. There are also innovations in handling. One concerns account consolidation.

The current draft law provides for automatic merging of accounts. The pension funds are informed by the umbrella organization of social insurance that if there are accounts that are no longer being paid in, then an automatic merger should be initiated. So in the future you no longer have to take care of it yourself, it will happen automatically. What there will certainly be is a four-week objection period.

When should the innovation come into force?

Now it is in political coordination that it should be decided with the employment package for older workers. But the changes would only be planned from January 1st, 2027 and a few more from January 1st, 2028.

Without expecting a general answer – how much does it add up on average over the course of a working life?

Of course, a little bit adds up because the employer pays 1.53 percent of the monthly gross salary including special payments from the second month of the employment relationship. The basic idea over twenty years ago was that you would receive an annual salary at the end of your working life. Unfortunately, this does not come to fruition because the performance of the pension funds is not that good. But it is an additional insurance.