The Impact of Widespread Occupational Pension Provision on Pension Levels

Under Austrian pension law, a continuous working career leads to a public pension of 80 percent of the average earned life time income. This study examines for a set of model carriers the effect of a general additional occupational pension scheme on the size of the first pension payment. An occupational pension – based on 2.5 percent of gross wages and salaries – increases the gross initial pension by 15 to 19 percent relative to persons without an occupational pension. Based on a CPI-indexed amount auf 150 € per year, gross increases in the first pension of 1 to 9 percent can be expected. Compared to full-time employees, part-time employees tend to achieve relatively higher pension increases through a general occupational pension system. The income distribution of newly awarded old-age pensions is hardly changed with a percentage based contribution model. With a CPI-indexed amount of 150 €, a more equal income distribution can be achieved by introducing a general occupational pension.