Financing Structure of Pension Insurance in Austria

Around 73 percent of the expenditure for old-age provision under the statutory pension insurance scheme is financed by contributions from active employees and around 27 percent by funds from the federal budget. On the one hand, this ties up around 13 percent of the federal budget. On the other hand, these budget funds are used to cover the socio-political functions assigned to the pension system, such as protection against poverty in old age, consideration of child-raising periods, provision for surviving dependants and much more. Understanding the current, multi-layered financing structure is a key prerequisite for developing well-founded concepts for the future design and optimisation of financing.