Greek Government to Reform Pension Insurance Policies

Greek Government to Reform Pension Insurance Policies

Revamping Greece’s Pension Insurance

The Greek Ministry of Labor is reportedly drafting a new insurance bill that, if passed, will bring significant changes to the country’s pension system. The proposed changes are said to concern debt regulations for pensioners, contributions from working pensioners, supplementary pensions, and the workings of Professional Insurance Funds (TEA). The bill is expected to come before the Parliament in the month of November.

Key Changes Proposed

The insurance bill introduces four key interventions aimed at providing relief to pensioners and ensuring a fairer distribution of insurance contributions.

Increasing Debt Limits

Freelancers and farmers are set to benefit from an increase in their allowable debt limits. The debt limit for professionals will grow from €20,000 to €30,000, while that for farmers will increase from €6,000 to €8,000. This change will enable more individuals in these categories to retire. The additional debt will be offset by 40% of the pension, with the remaining balance to be paid in up to 60 installments.

Abolishing Penalties for Working Pensioners

The bill proposes to do away with the current 30% penalty on the pensions of employed pensioners. Instead, a non-refundable resource in favor of EFKA will be provided, which will amount to 10% of the gross salary of the working pensioners. In addition, a contribution equal to 50% of the insurance category of the main insurance of pensioners who are practicing freelance professional activity will be introduced.

Introduction of Temporary Supplementary Pension

The third intervention is the introduction of a temporary supplementary pension for pensioners who have at least 15 years of insurance. This move aims to provide additional financial support to such pensioners, improving their quality of life during retirement.

Changes to TEA Supervision and Taxation

The bill also proposes changes to the supervision of TEA, the establishment regime, and the taxation of their benefits. These changes will include the creation of multi-employer Occupational Funds, the supervision of TEA by the Bank of Greece, and the taxation of pensions and lump-sum payments provided by TEA.

Aiming for a Fairer Distribution

The proposed changes reflect the Greek government’s commitment to reforming the pension insurance system for the benefit of all pensioners. By increasing debt limits, abolishing penalties, introducing a supplementary pension, and changing TEA’s supervision and taxation, the bill aims to provide relief to pensioners and ensure a fairer distribution of insurance contributions. The bill is expected to be discussed at a higher governmental level before it is brought before the Parliament.