Austria and Germany both have pay-as-you-go pension systems.
So the part of the population of working age pays for people of retirement age.
And after joining the pension the former working people are provided by the next generation.
As far as demographic change is concerned the population pyramids of both countries are almost identical. This is no coincidence as both countries have a similar story. The pension levels of both countries on the other hand could hardly be any different.
[1]
[2]
In Germany there is still the private pension system of the Riester pension. However if the pension is below the basic security then the Riester pension is counted. But these pensions in Germany turned out to be unprofitable because its return is hardly above inflation. The reason for this is that the calculated life expectancy is significantly higher than the actual one. In the linked investigation the pension period after the pension was 67 was 50 years. So a person has to become 117 years old just to break even. [6] [7]
The demographic change as an explanation for the low level of pensions in Germany falls flat. This can also be explained by simple comparisons. As long as labor productivity (technical progress in the production of goods and services) predominates the aging of society a pay-as-you-go pension systems continues to work.
[1] demographics Germany/Demographie Deutschland
https://de.wikipedia.org/wiki/Deutschland#Bevölkerung
[2] demographics Austria/Demographie Österreich
https://de.wikipedia.org/wiki/%C3%96sterreich#Bevölkerungsbewegung
[3] ALTERSSICHERUNG IN DEUTSCHLAND UND ÖSTERREICH: VOM NACHBARN LERNEN?
http://www.boeckler.de/pdf/p_wsi_report_27_2016.pdf
[4] Pensions at a Glance 2015 OECD anD G20 indicators
http://www.oecd.org/berlin/publikationen/pensions-at-a-glance-2015.htm
[5] RENTEN IN DEUTSCHLAND UND ÖSTERREICH - Fragen und Antworte - 2021-12
https://www.wsi.de/fpdf/HBS-008211/p_wsi_pb_64_2021.pdf
[6] Riester- und Rürup-Renten werfen nur mickrige Renditen ab - 2024-01-24
https://www.sueddeutsche.de/wirtschaft/riester-ruerup-altersvorsorge-1.6338057
[7] ester- und Rürup-Renten: Zwei Prozent sollten es schon sein - 2024-01-24
https://www.finanzwende-recherche.de/unsere-themen/riester/kundennutzen-bei-riester-und-ruerup-renten/
As far as demographic change is concerned the population pyramids of both countries are almost identical. This is no coincidence as both countries have a similar story. The pension levels of both countries on the other hand could hardly be any different.
Germany
In Germany the contribution rate to the statutory pension insurance is 18.9% and the employee and employer each take on 9.45%. The standard retirement age due to old-age is at an average of 64.3 years and for receiver of additional provisions at an average of 62.3 years. And there are 35 pensioners for 100 depositors. Thus the share of income from pension insurance in the federal budget at 23.6%. In Germany the standard level for pensions is at an average of 1,054.- Euros and at 898.- Euros for reduced earning pensions. [3,S.15] [3,S.16] [4,S.217] [4,S.266] [5,S.5] [5,S.10]In Germany there is still the private pension system of the Riester pension. However if the pension is below the basic security then the Riester pension is counted. But these pensions in Germany turned out to be unprofitable because its return is hardly above inflation. The reason for this is that the calculated life expectancy is significantly higher than the actual one. In the linked investigation the pension period after the pension was 67 was 50 years. So a person has to become 117 years old just to break even. [6] [7]
Austria
In Austria the contribution rate to the statutory pension insurance is 22.8% employees take over 10.25% and employers take over 12.55%. The standard retirement age due to old-age is at an average of 61.7 years and for receiver of additional provisions at an average of 60.3 years. And there are 30 pensioners for 100 depositors. Thus the share of income from pension insurance in the federal budget at 22.7%. In Austria the standard level for pensions is at an average of 1,794.- Euros and at 1,321.- Euros for reduced earning pensions. [3,S.15] [3,S.16] [4,S.217] [4,S.266] [5,S.5] [5,S.10]Conclusion
The German pension level in the listing of the OECD is already far back while Austria takes one of the front places. In direct comparison with Austrians they retire earlier and get paid higher pensions than Germans. So the question arises why Germany as the supposedly richest economy in Europe have a significantly lower pension level than small Austria. An essential part of the answer is the reduction of the employers part for the statutory pension insurance within the framework of the Agenda 2010 for wage retention.The demographic change as an explanation for the low level of pensions in Germany falls flat. This can also be explained by simple comparisons. As long as labor productivity (technical progress in the production of goods and services) predominates the aging of society a pay-as-you-go pension systems continues to work.
[1] demographics Germany/Demographie Deutschland
https://de.wikipedia.org/wiki/Deutschland#Bevölkerung
[2] demographics Austria/Demographie Österreich
https://de.wikipedia.org/wiki/%C3%96sterreich#Bevölkerungsbewegung
[3] ALTERSSICHERUNG IN DEUTSCHLAND UND ÖSTERREICH: VOM NACHBARN LERNEN?
http://www.boeckler.de/pdf/p_wsi_report_27_2016.pdf
[4] Pensions at a Glance 2015 OECD anD G20 indicators
http://www.oecd.org/berlin/publikationen/pensions-at-a-glance-2015.htm
[5] RENTEN IN DEUTSCHLAND UND ÖSTERREICH - Fragen und Antworte - 2021-12
https://www.wsi.de/fpdf/HBS-008211/p_wsi_pb_64_2021.pdf
[6] Riester- und Rürup-Renten werfen nur mickrige Renditen ab - 2024-01-24
https://www.sueddeutsche.de/wirtschaft/riester-ruerup-altersvorsorge-1.6338057
[7] ester- und Rürup-Renten: Zwei Prozent sollten es schon sein - 2024-01-24
https://www.finanzwende-recherche.de/unsere-themen/riester/kundennutzen-bei-riester-und-ruerup-renten/
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