Gaps between the active employment phase and receiving a pension.

VS – 08/2021

In recent years, with the exception of Poland and Romania, all of the EU member states have decided to readjust the standard retirement age for women to that of men in their old-age pension systems. In Austria, this readjustment from 60 to 65 years will start in 2024 and it should be completed during the second half of 2033.

However, the age limit does not necessarily indicate whether a person can remain in employment. The age limit, the actual retirement date and the end of the active employment phase might well differ significantly. This is particularly true for women in many European countries, including Austria and Germany.

Existing gaps between the end of the working phase and retirement

The Austrian research institutes, the Institute of Economic Research (WIFO) and the Research and Advisory Centre for the World ofWork (FORBA), have published a joint study on this topic entitled "Exiting the labour market, retirement and raising the retirement age for women from 2024".

The analysis of women's retirement in Austria since 2010 shows that there are huge gaps between the termination of employment and receiving a pension. At present, only almost half of all women receive their pension directly from an employment relationship. Only one third of women are employed in the hotel and catering industry as well as other economic services. There are also significant differences when it comes to the size of the company. Two-thirds of pensions from large companies are paid directly, whereas in companies with fewer than ten employees, only one third of pensions are paid directly. There are also significant differences with regard to qualifications and wage levels. Direct retirement from employment is more common in higher-paying companies. Women with gaps of up to five years are more likely to come from low-paying companies.

Furthermore, the analysis used qualitative company case studies to examine both the specific company and the individual views of the women employed there on the raising of the pension age. There are also clear differences between the specific sectors here. In particular, the companies surveyed in the care, retail trade and cleaning sectors are insufficiently prepared for raising the age limit for women. Previously they hardly focused on the adaptation measures that would be needed, such as maintaining the ability to work or redesigning workplaces to meet the needs of the elderly. The unemployed women who were also interviewed see little chance of finding a new job or working until the age of 60, mainly due to their own health problems and their age.

The increase in the statutory retirement age will not automatically lead to the active employment phase being extended

The authors of the study believe that the world of work needs to be adapted in such a way that it is age-appropriate and geared to maintaining the ability to work in order for an increase in the statutory retirement age to lead to a significant increase in the active employment phase of women. Small and medium-sized companies also need targeted and easily accessible advisory services for implementing the needed adaptation measures.

The results of the analysis can also be transferred to Germany. In order to ensure that the increase in the statutory retirement age leads to an extension of the working phase, it must be accompanied with a wide range of preventive measures. In particular, SMEs have a special need for advice in this area, as the first prevention report from the National Prevention Conference* has shown.