Government spending on pensions is rising sharply

2023-11-24 19:05:00

According to this, government spending on pensions will rise sharply in the next five years: from 28.3 billion euros this year to 39.3 billion euros in 2028. The Ministry of Social Affairs pointed out that, according to the long-term report, pensions are secured until 2070. In contrast, the WKÖ, IV and NEOS reacted with concern. AK, ÖGB and pensioners see no reason for alarmism.

3 reasons for the increase

Of the expenditure forecast for 2028, 21.8 billion euros are attributable to statutory pension insurance and 17.5 billion euros to pensions for civil servants. The strongest growth is expected for the coming year: According to the medium-term report, expenditure on statutory pension insurance will rise from 14 billion euros this year to 17.1 billion euros in 2024, and on civil servant pensions from 14.3 to 15.6 billion euros . According to experts, the reason for the sharp increase in pension spending is the larger pension increases due to high inflation, increasing pension additions due to demographic developments and current economic forecasts with lower growth rates in the coming years. In addition, an increase in average pensions can be observed due to higher incomes.

Crises with consequences

The crises of the past few years also have consequences for the pension system, explained Social Minister Johannes Rauch (Greens) on Friday. However, it is “gratifying” that the increase in pension spending stabilizes afterwards. “People in Austria can continue to trust in the pension system,” said Rauch. In order to make pension costs affordable in the long term, the actual retirement age must be aligned with the legal age by ensuring that employees stay healthy in their working life for as long as possible and do not retire early for health reasons.

In contrast, they showed themselves Neos alarmed. “If we don’t act now, the Austrian pension system will become unfinanceable sooner rather than later,” said social spokesman Gerald Loacker in a broadcast. Since average pensions rise faster than contributions, the pay-as-you-go system is difficult to count. What is urgently needed is “an end to sugarcoating and a real pension revolution, so that those who pay in today will still receive a decent pension in 30, 40, 50 years.”

IV sees a need for action

Also the Industrial Association (IV) saw an “increasingly urgent” need for action to reform the pension system. “The massively increasing need for subsidies from the budget is increasingly jeopardizing necessary future investments. Broad responsibility is needed here to make the pension system sustainable and financially viable again. Repeated “praying for health” doesn’t help,” said IV General Secretary Christoph Neumayer.

Die Chamber of Commerce (WKÖ) concluded from the report how urgent “further incentives for longer working hours are”. Above all, it must “finally be possible to bring the actual retirement age closer to the legal one,” said WKÖ General Secretary Karlheinz Kopf.

“No reason for alarmism”

They interpreted it completely differently Chamber of Labor (AK) the report of the Old Age Security Commission and sees “no reason for alarmism”. “Austria has no pension hole,” said the Upper Austrian AK President Andreas Stangl according to the broadcast and once again opposed calls for an increase in the retirement age.

Also the Pensioners Association emphasized that the long-term financial viability of the pension system was secured. “There is a spike due to the baby boomer generation now entering retirement. Firstly, this development is taken into account in all long-term forecasts and will be over in 2029,” explained the President of the SPÖ-affiliated Pensioners’ Association Peter Kostelka in a broadcast.