Pension Insurance

The purpose of pension insurance is to provide for the financial support of the insured person and the insured person’s dependents by means of the payment of pension benefits on retirement or following permanent incapacitation.

Pension benefits are intended to provide for the subsistence and maintenance of the pension recipient following the loss of their earning capacity. The Austrian pension insurance system is currently paying pensions worth a total value of some EUR 26 billion annually to more than 2.1 million recipients. A pay-as-you-go system (sometimes known as a “cross-generational pact”) is being employed to finance the payment of statutory pensions. This means that pension payments are largely financed from the contributions being made by those currently in employment. At present, these contributions cover some 80% of pension payments; the shortfall is made up by the government from its general taxation income.

Other aspects of pension insurance are health care and rehabilitation. Pension insurance organisations also maintain their own medical facilities that have the task of caring for and restoring the health and working capacity of insured persons.