In Austria, severance pay and related provisions are governed by the Severance Pay Act (BMSVG) and managed through the VBV-Vorsorgekasse.
Contribution to the Severance Fund
Rate: Remote People contributes 1.53% of the employee's monthly salary, including any additional special payments, to the VBV-Vorsorgekasse.
Purpose: This contribution ensures that employees build up a severance fund that will be available in case of termination of employment.
Capital Preservation
Security: The capital accumulated within the VBV-Vorsorgekasse is secure. This means that the funds are preserved regardless of how or when the employment relationship ends. Employees can be confident that their severance pay is safeguarded.
Options Upon Termination
When an employee's employment ends, they have several options regarding their severance fund:
Severance Pay:
Employees may choose to receive their accumulated severance pay directly.
Continued Investment:
Employees can opt to continue investing in the same occupational pension fund if they prefer to keep their funds growing within the existing scheme.
Transfer to a New Fund:
Employees have the option to transfer their accumulated severance pay to a new pension fund if they start a new job or wish to invest elsewhere.
These provisions ensure that employees have flexibility and security regarding their severance pay, supporting their financial stability during transitions between jobs.