Labor law (AT)
Severance pay new
Also: Severance · BV fund · corporate pension scheme
Under the “severance pay new” system, employers contribute 1.53% of the monthly gross salary into an occupational pension fund for all employment relationships commenced since 2003. Unlike before, the accrued balance is preserved and transferable even upon voluntary resignation.
Key Points
- Applies to all employment relationships that began on or after January 1, 2003 (previously: “severance pay old”).
- The employer continuously contributes 1.53% of the monthly gross salary into an occupational pension fund (BV Fund).
- The legal basis is the Occupational Employee and Self-Employment Provision Act (BMSVG).
- Backpack principle: The entitlement moves with the person from job to job and is preserved even upon voluntary resignation.
- The payout depends on the type of termination and the duration of contributions; otherwise, the balance continues to be invested.
What is the new severance pay?
The “severance pay new” is the Austrian occupational pension scheme for all employment relationships begun on or after January 1, 2003. The legal basis is the Occupational Employee and Self-Employment Provision Act (BMSVG). The employer continuously pays 1.53% of the monthly gross salary into an occupational pension fund (BV Fund) that manages the balance.
Severance pay old
The entitlement only arose after a long period of service and was usually lost upon voluntary resignation.
Severance pay new
Ongoing contributions to a BV Fund; the balance is preserved and transferable even upon voluntary resignation.
How does the backpack principle work?
The “backpack principle” means the entitlement moves with the individual from job to job. When someone changes employers, the new company continues to pay into the same BV Fund; the accumulated balance remains intact. Unlike the old system, the entitlement is not lost when changing jobs.
The balance is paid out or continues to be invested depending on the type of termination and length of service. A payout entitlement typically does not exist immediately upon every voluntary resignation—if requirements are not met, the balance remains in the fund and continues to grow.
What does this mean when changing jobs?
No loss when changing jobs
Because the balance moves with you, a job change does not have to mean a financial loss in severance pay. This removes a barrier for candidates—a move to a more suitable employer does not cost the accrued benefits.
Frequently Asked Questions
- Do I lose the new severance pay if I resign voluntarily?
- No, the accumulated balance is preserved. Whether it is paid out or remains invested in the occupational pension fund depends on the type of termination and duration of contributions.
- How much is the contribution for severance pay new?
- The employer continuously pays 1.53% of the monthly gross salary into the occupational pension fund. The employer solely bears the contribution.
- Does the new severance pay apply to all employment relationships?
- It applies to employment relationships that began on or after January 1, 2003. For older, ongoing employment relationships, the “severance pay old” may still apply.
Note: This entry provides an overview to the best of our knowledge (as of: July 2026) and does not replace legal advice. Binding information is provided by the Chamber of Labour and the relevant trade union.