Vienna (OTS) –
- Demographic change: the number of pension recipients continues to rise rapidly, only a few countries are prepared
- Scandinavia and the Benelux countries achieve the best values, with Austria in the middle with a score of 3.4
- Great potential for sustainability in the Austrian pension system
- Reassessment of work as a central adjusting screw
Austria’s pension system only achieved a place in the middle with a score of 3.4 points in the international “Global Pension Report 2023” by Allianz Versicherung. According to the current study, the appropriateness of relatively generous pensions in this country is clearly at the expense of sustainability. Of course, Austria is not alone in its need for reform. “Pension systems around the world are like a large permanent construction site with no hope of completion,” says the Allianz report. Only a few countries like Denmark, Sweden or the Netherlands are well prepared for the upcoming demographic changes.
Sustainable reform of pension systems is essential
By 2050, the proportion of over-65s in the working population in Austria will increase significantly. “This development puts us in a problematic situation if the reform process of our pension system is not continuously pushed,” emphasizes Andreas Csurda, CEO of Allianz Pensionskasse AG, who calls for a significant strengthening of the company and private pension pillars. “The reforms must start with the sustainability of the system in particular. Even higher contributions to company and private pensions should not be taboo – after all, Austria’s pensioners will spend an average of around 25 years in retirement in the future,” says Csurda.
Generations Y and Z demanded in old-age provision
The Allianz Report predicts that the global old-age dependency ratio will climb from 15.1 percent today to 26.3 percent by 2050. The most recent data, for example from China, Korea or Italy, indicate a further acceleration in demographic change. In particular, the number of births is developing more subdued than expected, despite all family policy initiatives. “The intergenerational contract has become brittle almost everywhere. The younger generations Y and Z in particular are required to make more provisions for old age themselves. The inconvenient truth is that you will need to work longer, save more and be more focused,” summarizes Csurda.
political dilemma
Compared to the last Global Pension Report three years ago, only a few countries such as France or China have significantly improved their scoring. In general, the fiscal leeway has again narrowed significantly in most countries after Corona, war and the energy crisis. A circumstance that once again clearly emphasizes the need for comprehensive pension reforms. The study also attributes the fact that rhetoric is rarely followed by powerful deeds to a political dilemma: impositions today in order to avoid later cuts are less popular than distributing charity. Those countries like Denmark, Sweden and the Netherlands, which have a stable pension system, have one thing in common: They set the course for sustainability early on, at a time when demographic change was still having a much smaller impact.
Fundamentally rethink work and pension systems
Although the window of opportunity for sustainable reforms is shrinking, there is still hope. In addition to the technical details, such as contribution amounts and times, there is a central lever for sustainable and appropriate pension systems: the social value of work, according to the Global Pension Report. “Automation, digitization and artificial intelligence enable universal access to education and thus new work concepts. The rigid dichotomy between employment and retirement is currently only being resolved for a privileged few. The pension system of the future begins to rethink the world of education and work for everyone,” emphasizes Ludovic Subran, Chief Economist at Allianz.
The Allianz Global Pension Report
The second edition of the Allianz Global Pension Report uses the Allianz Pension Index (API) to analyze 75 pension systems around the world. The indicator consists of three pillars: analysis of the demographic and fiscal situation and determination of the sustainability (e.g. financing and contribution periods) and adequacy (e.g. degree of spread and pension amount) of the pension system. A total of 40 parameters are taken into account, with values between 1 (very good) and 7 (very bad). In the weighted sum of all parameters, the evaluation of the respective system is crystallized in an overall grade.
Link to the study: https://www.allianz.com/en/economic_research.html
Downloads im Allianz Pressecenter
- Photo: Andreas Csurda (© Allianz, reprint free of charge)
- Press release as PDF
- Allianz Global Pension Report 2023 as PDF
Please note our caveat regarding forward-looking statements:
Questions & contact:
Monica Sacher
Head of Corporate Communications
Allianz Group in Austria
M: +43 676 878 21 21 08
E-Mail: presse@allianz.at