Pension funds in crisis mode: urgent reform requirement required!

Pension funds in crisis mode: urgent reform requirement required!

Laimgrubengasse 10, 1060 Wien, Österreich - On March 19, 2025, the Austrian Senior Council pointed out the serious problems in the pension fund system in a press conference. President Ingrid Korosec expressed the urgency that before further steps in the expansion of retirement provision are taken, talks with the finance minister have to take place. Their reflected statement illustrates the frustration that "a lot does not work here and the pensions are less and less instead of more." In response to the current Misslage, Pekabe, the protection association of pension funds entitled to pension funds, is calling for a comprehensive reform of the Pension Cash Act. According to the current reports of Pekabe, the existing law, which massively restricts the economic freedom of the beneficiary, is to be regarded as a kind of "gag contract" in its current form. Many beneficiaries have experienced tragic losses of their pension claims over the past few years - sometimes up to 50 percent.

Pekabe calls for an immediate reform of the Pension Cash Act (PKG) in order to permanently stable the second pillar of the pension system. Peter Weller, President of Pekabe, explains: "If the second pillar is to become part of a sustainable pension system, a reform of the PKG must occur." This reform is not only a question of the fair treatment of the beneficiaries, but also the need that they can expect an adequate pension for their own deposits. Particularly alarming is the below -average performance of the pension funds, which cannot even deliver the required yields in order to avoid cuts. As can be seen from the reports of the control bank, these values are far below the necessary invoice interest, information that the data subjects protects only in their daily challenges.

urgency of a rethink

In addition, lobbyism in the insurance industry is denounced as a hindrance to expand operating pensions. While the arguments of the insurance companies are questioned by "securing living standards", the pressure on politics remains. Pekababe demands from the upcoming federal government to tackle the grievances for a long time and to take the votes of the pension funds seriously. According to the claims, a minimum yield guarantee, the release of risk profiles and improved transparency to the norm should become, among other things, to combat age poverty and to strengthen the rights of the beneficiaries.

Overall, the current conditions in the pension fund system urgently require the attention and action of politics in order to offer the beneficiaries a perspective that goes beyond mere existence. While the first pillar of retirement provision seems largely safe, many at the moment are threatening unexplained questions about the second pillar, as Pekabe makes clear.