Corporate provision fund - new severance payment scheme

The new severance payment scheme (Abfertigung Neu) enables both employees and employers to have a vested claim for severance pay which can be used optionally as an additional pension for extra security in old age.

As this is a corporate fund, no payments from private means are required. The new severance payment scheme is therefore a critical step in reinforcing pension provision.

Payments by the employer

After the first month, the employer makes a monthly payment for each employee totalling 1.53 % of the gross salary to the selected corporate provision fund (currently Valida Vorsorge Management); the percentage amount is legally stipulated. The legally stipulated amount of 1.53 % of the monthly gross salary is exempt from tax for employees..

An annual statement of account is sent directly to the employees by the corporate provision fund.