The Austrian pension package passed by the National Council on 10 July is a “significant step in the right direction", according to the Austrian Federal Economic Chamber (WKÖ) secretary general, Jochen Danninger.

He noted that the reform includes measures recommended by the OECD to address the challenges of an ageing society.

Austria's National Council passed the pension reform package introducing a new partial pension scheme last week, allowing people who already qualify for a full pension to reduce their working hours by 25 per cent to 75 per cent while drawing a proportionate pension.

The law also tightens rules on early retirement, reducing the maximum period of early retirement from five to three years.

Meanwhile, from 2026 to 2028, employer wage compensation for part-time retirees will temporarily drop from 90 per cent to 80 per cent.

Additionally, a new sustainability mechanism will monitor pension system costs, with automatic adjustments, such as raising the early retirement age or reducing pension indexation, triggered if budget limits are exceeded.

During a debate at the National Council, FPÖ opposed the entire reform, accusing it of eroding retirees' rights, while the Greens supported the partial pension but criticised restrictions on early retirement and the sustainability mechanism.

However, NEOS called it a "historic step" and welcomed the pension policy update after 20 years.

Also praising the changes, Danniger said the new partial pension would keep people who would otherwise retire early in the workforce, and welcomed the move to shorten the partial retirement model and increase the access requirements.

"Given the fact that we urgently need to cut government spending, this restriction is essential," he argued.

"However, the establishment of a sustainability mechanism, which will kick in if pension costs rise excessively by 2030, is also correct and important to ensure the sustainable financing of the pension system," added Danninger.

The Secretary General urged that further steps must be taken to follow the current pension package.

"To better utilise the potential of older people, their know-how, and their life experience, we need additional incentives for longer working hours," he continued, referring to the tax breaks for additional income during retirement provided for in the government program.

He also called for the partial retirement model to be opened up to the self-employed.

"It cannot be the case that employees can transition flexibly from working life into retirement, but the self-employed do not have this option," added Danninger.

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