PVA (Pension Insurance Institution, Austria)

Concept

The Pension Insurance Institution (Pensionsversicherungsanstalt, PVA) is the largest carrier of statutory pension insurance under the ASVG and, for employees, performs the function that in the Swiss system is split between the AHV and disability insurance (IV): it pays old-age pensions, disability pensions for permanent incapacity for work, and survivors’ pensions (widow’s, widower’s, and orphan’s pensions). Financing is pay-as-you-go through payroll contributions, supplemented by a substantial federal subsidy.

Pension account and pension amount

Following the pension reform, individuals born from 1955 onward are subject to the pension account system, under which an annual credit equal to a fixed percentage of earnings is recorded; the eventual pension is calculated from the sum of these credits. The statutory retirement age, deductions for early retirement, and the crediting of substitute periods (e.g. child-rearing, military or alternative service) significantly affect the actual pension amount.

Relevance for insurance practice

Since the statutory pension from the PVA is typically insufficient to maintain the standard of living enjoyed before retirement, knowing the projected PVA benefit – shown in the annual pension account statement – is a key starting point for advising on occupational and private retirement provision (pension funds, life insurance, severance pay).