AUSTRIA - Karl Blecha, head of the European Senior Organisation (ESO) has demanded the three-pillar retirement system be scrapped and Austrians go back to  relying solely on the state as their pension provider.   The former Austrian interior minister made comments in Tallin (Estonia) at the opening of the annual meeting of the ESO - a representative body for pensioner groups affiliated with the European Social Democrats.   "The often shunned, defamed and libelled state is the only one who can guarantee stability in this financial crisis," said Blecha, who also heads an Austrian pensioners association.   He named "the abolition of the three-pillar retirement system" as one of the main demands of the ESO.   "In this current market crisis the weakness of Pensionskassen and funded retirement plans is showing, with all force," Blecha said.   He wants more safety nets for Austrian pensioners who might be facing pension cuts this year because of the high conversion rates set down in their contracts.   A more conservative retiree body, the Seniorenbund, stressed it was "not the system itself [which] is wrong" though suggested there was a "dire need for safety measures".   The organisation demanded the implementation of the long-debated EET model for contributions to Pensionskassen.   It also wants a tax cap on benefits from Pensionskassen which are currently added to the state pension and then taxed accordingly.   The ESO has also demanded a state "buffer fund" be created which should be used "solely in cases of grave financial turbulences".   "We have to give the people security in this situation. They have to be able to count on the system," a spokesman for the Seniorenbund commented.   The diverging positions could be an indication of problems surfacing within the government coalition negotiations currently held between the Social Democrats and the conservative ÖVP in Austria.   The parties' last attempt to run a coalition government had failed over the pensions issue. (See earlier IPE article: Pension deal dies along with coalition)   Meanwhile, the head of the economic research institute Wifo, Karl Aiginger, said more guarantees in Pensionskassen should be considered.   However, bank analysts suggest this is counterproductive as guarantees cost more and hinder performance enhancing investments. (See earlier IPE story: Capital guarantee hinders pensions - analyst)   If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

Topics