More than two-thirds (68 per cent) of Austrian workers believe they will need an occupational pension alongside the state pension to ensure financial security in retirement, according to research commissioned by the Austrian Association of Pension and Provident Funds.

The UNIQUE research study found that just 22 per cent of employed respondents believe the state pension alone will be sufficient.

The findings come as Austria prepares what the association described as the biggest reform of its occupational pension system since pension funds were introduced.

The legislative package is intended to broaden access to second-pillar pensions, create greater scope for investment returns and member choice, and simplify access to supplementary occupational pension provision.

A central element is the introduction of a general pension fund agreement, which the association has called for over many years.

Under the proposed changes, more employees would be able to build up additional pension savings through pension funds by transferring assets from the new severance pay scheme.

Austrian Association of Pension and Provident Funds chairman, Andreas Zakostelsky, said: “With this reform, the federal government is taking an important step towards modernising the pension system.

“Countries like Denmark demonstrate the potential of a strong, broadly based occupational pension scheme. Austria is now starting a catch-up effort with regard to supplementary pensions through pension funds.”

The research also found generally positive attitudes towards expanding occupational pensions, with 36 per cent viewing the proposed expansion positively and a further 31 per cent saying they were open to it.

UNIQUE research market and opinion researcher, Dr Peter Hajek, argued the results showed that many workers recognised the need for additional retirement provision, particularly those under the age of 50.

“The key finding is clear: Many people see the need for additional security in old age,” he continued.

“Especially among those under 50, there is a strong belief that company pension schemes are needed in addition to the state pension.”

The proposed use of new severance pay assets as supplementary pension savings also attracted support, with 45 per cent of respondents considering it "very or somewhat sensible" to convert the capital into a monthly pension through the second pillar.

Support was particularly strong among younger workers, those with higher levels of education and those satisfied with the returns generated by the existing severance pay arrangement.

Zakostelsky noted that the severance pay system could become an important mechanism for increasing retirement saving if the capital could be more readily converted into lifelong pension income.

The survey also highlighted differing priorities among savers.

Tax advantages were cited as important by 31 per cent of respondents, while 29 per cent highlighted higher return potential.

However, 36 per cent stressed that greater security and guarantees were particularly important.

The association stated the reforms could therefore support the development of different pension fund offerings, including a growth-oriented model targeting higher returns and a more conservative option focused on security.

Zakostelsky concluded that the next stage would be to explain the reforms and encourage more employers to provide occupational pensions.

“The study shows: The potential is there – now we need to explain it and make it accessible to employees," he concluded.

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