Beirat für die Renten- und Pensionsanpassung (1995): Gutachten betreffend die Festsetzung des Anpassungsfaktors für das Jahr 1996, Wien.
Busch, G. (1986): “Nur langsame Konsolidierung der Sozialbudgets—Die Entwicklung der sozialen Sicherheit im Jahr 1985,” WIFO-Monatsberichte (Austrian Institute for Economic Research), 6/1986
Busch, G. (1992): “Sozialpolitik zu kurzfristig orientiert—Zur Entwicklung der sozialen Sicherheit im Jahr 1991,” WIFO-Monatsberichte (Austrian Institute for Economic Research), 8/1992.
Butschek, F. (1991): “Die aktuellen Probleme der österreichischen Pensionsversicherung,” WIFO-Monatsberichte (Austrian Institute for Economic Research), 11/1991.
Glismann, H. and E.-J. Horn (1995): “Die Krise des deutschen Systems der staatlichen Alterssicherung,” ORDO-Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, vol. 46.
Hauptverband der österreichischen Sozialversicherungsträger (1995a): Handbuch der österreichischen Sozialversicherung 1994, Wien.
Hauptverband der österreichischen Sozialversicherungsträger (1995b): Statistisches Beiheft zum Handbuch der österreichischen Sozialversicherung 1994, Wien.
Hauptverband der österreichischen Sozialversicherungsträger (1995c): Beitragsrechtliche und leistungsrechtliche Werte in der Sozialversicherung – Übersicht 1995, Wien.
Holzmann, R. (1993): “Economic Aspects of Pension Reform in OECD Countries,” International Institute of Public Finance (ed): Proceedings of the 48th Congress of International Institute of Public Finance, Seoul.
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The authors are grateful to Benedict Clements, Hans Flickenschild, Sanjeev Gupta, Albert Jaeger, Russell Kincaid, and Johann Prader for discussions and many helpful suggestions, and once again to Albert Jaeger for providing the framework of the projection model, and to Messrs. Grillitsch and Wolf of the Austrian Social Security Association and the Austrian Central Statistical Office, respectively, for providing data.
World Bank (1994b), p. 343ff. and p. 358ff. Most of the data in Chart 1 refer to the period 1992-94. Recent OECD statistics show Italy slightly ahead of Austria with 15.2 percent of GDP in 1993 (OECD, 1995).
Population over 64 years in relation to population 15-64 years.
They have to pay 10.25 percent and 12.55 percent, respectively.
In the 1996/97 fiscal consolidation package, the second factor has been increased to 2 percentage points in an effort to increase the implied penalty for early retirement and thereby raise the actual pension age towards the statutory one.
Austria’s total pension expenditures of roughly 15 percent of GDP in 1994 consist of 10.2 percent of GDP for the two main pension schemes of employees and the self-employed, 4.2 percent of GDP for the civil servants, and approximately 0.5 percent of GDP for accident-related pensions paid by the accident insurance.
Since pensions are indexed to (net) wages, the average wage level on both sides is roughly the same.
The problem of short-sighted policy measures could be particularly relevant in the Austrian case since there is no independent body which provides analysis and assesses the current and future actuarial status of the system without making policy recommendations—like the “Government Actuary” in the United Kingdom or the “Board of Trustees” in the United States.
Contribution rates differ slightly for a few small groups (e.g., miners), but the differences are negligible. Cf. Hauptverband der Sozialversicherungsträger (1995c).
See Lehner (1995), p. 758; and also Beirat für die Renten- und Pensionsanpassung (1995).
See Chand and Jaeger (1996, Appendix I) for a technical description of the model. Since the schemes for employees and the self-employed vary in their setup, they were treated separately in the model and the results were subsequently aggregated.
The macroeconomic framework for the projections of the other countries is similar; see Chand and Jaeger (1996) for details.
The main sources are: Hauptverband der Sozialversicherungsträger, Statistikdatenbank: Statistische Daten aus der Sozialversicherung; Österreichisches Statistisches Zentralamt, Sozialstatistik; and Bundesministerium für Arbeit und Soziales (1995a, b).
Data on future demographic trends in the selected industrial countries are taken from the World Bank’s World Population Projections 1994-95. The World Bank population projections for Austria are also similar to Austria’s official demographic projections.
In order to balance the system, the budget transfer in 1995 already increased to 2.1 percent of GDP.
A study of the Austrian Council for Pension Adjustment of 1991 (with 1988 as the base year) also showed a long-term deterioration of the financial situation of the pension system, but no significant deterioration in the short and medium term (Beirat für die Renten- und Pensionsanpassung, 1991).` Since the early 1990s, however, eligibility and transfer ratios have increased and worsened the outlook significantly.
These pension expenditure levels are not directly comparable across countries since some exclude civil service pensions (e.g., for Austria) while others (e.g., for Italy) include them.
See, for example, Holzmann (1993) for a discussion of the issues involved in pension reforms across the European OECD countries.
Germany, for example, decided in its 1992 pension reform to gradually increase the retirement age for women from today’s level of 60 years to 65 years. In 1996 it was decided that this increase will start in January 2000 and be completed by December 2004.