Study Of The Austrian Pension System

Old age protection has become one of the top priorities of modern social protection system. Since the end of the 20th century, the comparatively slow economic growth, high unemployment rate, the worsening aging of the population etc have produced great pressure on the budget of the welfare states, and brought great impact on the development of the pension system. How to keep the Sustainability of the current pension system as well as adequate pension has become the key point of reform and the focus of attention.After reviewing the relevant literature concerning pension system and the economy theory on pension development, the author mainly studies the development of pension system in Austria, finds out how Austria has achieved its full coverage, and its reform on the current pension system to ensure the Sustainability of the system while at the same time providing adequate pension payment for the retiree. The author also studies how Austrian pension system has been ensured by the whole social system. Then empirical study and international comparison help deepen people's understanding of Austrian pension system.100 years ago, Austria started to establish a pension system for its citizens. But the political and economic situation at the time didn't support a unified pension system for the whole country, although it tried several time for one. Only after World War II, fast economic development, high employment rate, and stable political situation have made the establishment of a complete pension system possible. The pension coverage improved, the pension payment increased, Austrian people began enjoying a fair protection by the pension system. But the high protection did not last for too long. New situation came to endanger the Sustainability of the established pension system, and the government was under great pressure to support its functioning. With the suggestion from the EU, Austria started to reform its pension system under the guideline of ensuring the Sustainability and adequacy of pension. A three-pillar mechanism is to replace the original generous pension insurance, with the slight decline of first pillar—pension insurance, and encouragement of the second and third pillar of old age protection—annuity and personal life insurance. A personal pension account is to be established under the pension system for the ensured who have not jet reached the age of 50 by 2005. The establishment of the personal pension account has improved the transparency of the system, and thus in one way maintained people's trust in the pension system and facilitated the Sustainability of the system. In order to smooth the transition into the new system, the government has to shoulder the certain percentage of pension loss for those applicable with the old and new pension systems. Also the government's responsibility has been clarified, by listing some periods of life, during which pension coverage is ensured but no contribution is to be paid. All these measures add to the perfection of the pension system in Austria.Through the thorough study of Austrian pension system, some implications have been made to the establishment of a fair pension system in China. Firstly, the establishment of a pension system should be ensured by the promulgation of certain laws, protecting people's rights for the old age protection. And at the same time, we need to bear in mind that the perfection of the pension system is a time consuming process.Secondly, the long process of the system establishment is only possible by sticking to the basic rules of social insurance, connecting the pension benefit with the contribution and the government support as the last resort.Thirdly, as for the actual institution construction, in order to provide full coverage for the population and protection, a thorough classification of the working people is to be carried out, and thus to device appropriate mechanism for the provision of protection. Austrian categorization of population as the employed and the self-employed is also of some feasibility in Chinese pension system construction and reform. But other characteristics of the situation in China, such as migrant workers, and the household registration system are also to be considered.Last but not least is that the transparency of the system must be insured in the development of Chinese pension system. And if we further our study into the developed pension systems, some more enlightening implications are sure to be found out.