
Your VBV pension plan
In the following video you will get a short overview of the pension fund system in Austria as well as contracts and contributions.
The Austrian pension system
In Austria, as in most other European countries, the pension system works on the so-called “three pillar model”.
The first pillar: state pension plan
The state pension plan is the most important one. The involvement of all gainfully employed people is obligatory. The working population finances the generation of retirees. Therefore, it is important that there are enough (or significantly more) employed people in proportion to the number of retired people. The state scheme ensures a good basic provision in old age.
The second pillar: occupational or collective pension plan
The occupational or collective pension plan is financed by the employer and supported by the state.
The third pillar: private or individual pension plan
The private or individual pension plan is adapted to specific individual requirements (such as savings, life insurance, investment funds etc.).
Things you should know about VBV-Pensionskasse
The employer declares their intention to provide employees with pension benefits. A company agreement describes the pension benefit conditions. The employer then undertakes a pension fund contract with VBV-Pensionskasse according to that company agreement.
A life cycle pension model is a specific form of a defined contribution pension fund scheme. If the employer implements such a pension plan, there are up to three different investment portfolios employees can choose before retirement.
The automatic life cycle pension model has defined age-limits where the switch into another portfolio – with less risk – is planned. In the classic life cycle pension model the employee decides when they want to switch theirinvestment portfolio.
Yes, you can increase your VBV pension through employee’s contributions. You may contribute up to 1,000 Euro per year and benefit from a government-sponsored premium. The resulting pension is up to 100% tax free.
As soon as your employer informs us about the termination of your employment you will receive an information letter from VBV-Pensionskasse with further details about the handling of your capital. According to the legal guidelines, the payment of a lump sum is only possible under the following provisions:
- The right to draw a lump sum may depend on the fulfilment of a certain period of contribution payment, which is stated in the pension agreement.
- Your employment has to be terminated. We have to await the employer’s announcement of your employment termination.
- The lump sum resulting from employer’s and employee’s contributions together must not exceed 15,900 Euro (value 2025).
The legal limit according to § 1(2) and (2a) PKG (Pensionskassengesetz) is upgraded regularly confirmed by law and according to specifically defined policy.
If the lump sum exceeds the legal limit you may request:
- the conversion of the capital into a non-contributory qualifying entitlement;
- the transfer of the capital to the pension fund, collective occupational insurance scheme, pension scheme according to § 5 (4) PKG or collective annuity insurance scheme of a new employer, or to an annuity insurance scheme with no entitlement to surrender;
- the transfer of the capital to a foreign retirement pension model if you are changing your place of employment to abroad on a long-term basis or
- the continuation of the scheme with your own contributions.
Usually, your employer informs us about your retirement and we will send you a letter with all details and forms we need to pay out your supplementary pension. If you do not retire from the employer who implemented the VBV pension plan for you, please contact us as soon as you receive the retirement notification from the state pension (ASVG-Bescheid).
Your initial pension will be calculated according to the contract conditions and depends on several factors, for exeample your capital, your age at retirement and the investment result.