Das österreichische Pensionssystem im europäischen Kontext: Analyse von Vorbildern und Potenzialen kapitalmarktorientierter Reformansätze

Abstract

The Austrian pension system is based on a pay-as-you-go model that has so far provided a stable foundation for retirement provision. However, this stability is increasingly coming under pressure due to demographic change, structural weaknesses, and a lack of diversification. While other European countries have established hybrid systems combining basic state pensions with funded components, Austria relies heavily on the first pillar, which accounts for around 90 % of benefits. The declining ratio of employed persons to pensioners, rising life expectancy, and high subsidies from the federal budget threaten long-term financial sustainability. Capital market-oriented models could help alleviate these pressures, but in Austria, they face low acceptance, which can be attributed both to widespread skepticism toward capital markets and to an often insufficient level of financial literacy. The aim of this thesis is to analyze the potential of funded models and to identify success factors from European best-practice examples that could be transferred to the Austrian context. The central question is how funded components can contribute to ensuring the long-term stability of the Austrian pension system. To address this research question, a comprehensive literature review was first conducted, examining the structure, historical development, and legal foundations of the Austrian pension system and comparing them with international models. Recent studies, such as the Allianz Global Pension Report 2025 and the Mercer CFA Global Pension Index 2024, were taken into account. The Danish pension system was selected as a best-practice example, as it combines a highly diversified three-pillar model with a strong integration of funded and pay-as-you-go elements. In addition, qualitative expert interviews were conducted with specialists from politics, administration, business, and academia in Austria to assess the practical transferability and acceptance of funded pension approaches. The results show that an efficient capital market can make a significant contribution to stabilizing the pension system by mitigating demographic risks and generating long-term returns. The Danish model demonstrates how sustainable security can be achieved through mandatory contributions, broad diversification, institutional independence, and the dynamic adjustment of the retirement age to life expectancy. For Austria, particular recommendations include tax incentives, a structural expansion of the second pillar, and targeted financial education to improve capital market competence. However, political feasibility remains a major obstacle, as unpopular – albeit necessary – reforms are often avoided for political reasons. Overall, the study shows that a gradual introduction of funded elements, combined with public education and legal adjustments, is essential to ensure the long-term stability and sustainability of the Austrian pension system.

Date of Award	2025
Original language	German (Austria)
Supervisor	Tamara Albrecht (Supervisor)