To Transfer Or Not To Transfer: That Is The Question

Austria has two systems of statutory severance payments. One applies to employment contracts that started before 2003 (Abfertigung Alt; old system) and one to contracts that started in 2003 or later (Abfertigung Neu; new system). Mixed systems or total transfers from the old system to the new system are possible, but not for long.

Under the old system, the employee, upon termination of employment and subject to certain conditions, has a claim against the employer for statutory severance payment. This claim (up to 12 monthly remunerations) is calculated based on the employee's lengths of service with the employer and his remuneration upon termination of the employment.

Under the new system, the employer pays monthly contributions to an external pension fund based on the employee's remuneration. When the employment ends, the employee has a claim against the fund.