The Old-Age Pensions Reform Act of 1997 aimed at containing labour cost by
reducing the rate of contributions expected for the year 2030 to 22.4% of gross wages
(1997: 20.3%). The great Pensions Reform Act of 1989 (effective from 1992) had
already reduced the expected rate from 36% to 26%. In 1997, a ‘demographic factor’
was introduced: with growing numbers of elderly the replacement ratio should be
gradually reduced from 70% to 64% in 2030. The big achievement of the 1957 reform
to secure in old age the living standard attained during working life was given up. The
act also aimed to reduce early retirement and increased the retirement age for women.