AUSTRIA - The pension schemes for civil servants of the states and municipalities should be harmonised along the lines of the 2004 reform of occupational pensions, the OECD says.
While phased harmonisation of pensions for federal civil servants with the rules of the general scheme is a major part of the new pension legislation, the OECD said the “often more generous” pension schemes for civil servants of the states and communities, which are not yet harmonised, should also be.
“Lower levels of government are urged to provide regularly updated information about their implicit future spending liabilities and to develop systematic fiscal sustainability calculations,” the OECD said in its economic survey of Austria 2005.
“The pension schemes for civil servants of the states and municipalities should be harmonised with the rules of the APG (Allgemeines Pensionsgesetz, General Retirement Act) scheme. Harmonisation also requires that special early retirement programmes are terminated and more efforts are made to relocate redundant public sector workers.”
Austria gave the green light in November last year to harmonisation of pensions between civil servants and the rest of the workforce. Civil servants previously got enhanced pensions - 80% of their final salary if their earnings were above the social security ceiling.
While the OECD praised the 2004 reform package, which also established individual pension accounts, the organisation said continued reform was needed to further reduce incentives for early retirement.
“The new pension law aims at actuarial fairness for persons eligible for earlier or later retirement on account of an insurance record of 37.5 years,” the OECD said.
“However, there still appears to be a bias in favour of early retirement and against activity beyond the statutory retirement age for employees with a very long insurance record and those engaged in onerous work. All types of old age pensions should be made actuarially fair around the statutory retirement age, while the impact on labour supply should be monitored carefully.”
Other additional reform measures suggested by the OECD included revision of the newly introduced early retirement scheme for “heavy workers”. The scheme aims at compensating for above average physical or mental stress during working life but the organisation described the definition of such workers as ambiguous and said it provides no incentives to improve work conditions.
“As a minimum, employers of “heavy workers” should be requested to make a financial contribution to the scheme that fully covers the additional costs,” the report noted.
Lastly, the OECD proposed reform of the system for provision of disability benefit to strengthen incentives of employers for avoiding work-related accidents and sickness and increase the motivation of the people concerned to stay in the work force longer.
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