New Cuts and No Pension Before 62



assurance system-pensions GreeceThe social security issue is once again on the table after the statements of the Finance Minister Yiannis Stouraras, and of the Labor Minister Yiannis Vroutsis in Parliament. Mr. Vroutsis made clear, that the law will be strictly implemented and therefore, from January 1, 2014, the introduced formula will apply for the calculation of lump-sum payments and from June 6, 2014, for the calculation of supplementary pensions. Also, Mr. Vroutsis announced cuts in lump-sum payments that will amount to 80%, as they are lacking contribution payments.

Furthermore, the Minister of Labor clarified that “the law [3863/2010] is a law of the state. It will be applied and it will not change seeing as it constitutes a structural change. He also explained that a committee of technocrats is being established in order to “welcome the new system.”

According to executives of the social funds, the implementation of the law will bring new pension cuts that concerns mostly 250,000 people insured in the public utility companies (DEKO), in the banks, and of the old Greek Fund for Craftsmen and Small Traders (TEBE), as well as people independently employed (lawyers, doctors, engineers) aged over 55. According to the estimations, it is possible that in some cases the reduction will reach 40%, while for TEBE it won’t exceed 10%.

Mr. Vroutsis pointed out once more, that the law will not affect the current pensioners, assuring the unhindered payment of the pensions.

The next intervention of the government focuses on the increase of the average retirement age, through the removal of exemptions and favorable regulations. It is estimated that almost 350,000 insured people will be affected, with some of them being also in the category that will receive the pension cut. Specifically, retirement before the age of 62 is expected to discontinue and that concerns approximately 350,000 employees in the public sector and in the special funds, (DEKO, banks a.o) in order for the funding gap of 2.1 million euros in social insurance to be covered for 2014.

This involves insured people in the special funds before 1983, self-employed and public employees who are covered by special provisions, such as retirement with a 35-year insurance without age limit and the mother of minors. The intervention is likely to affect people who have a vested right to pension, in order for the state to assure direct fiscal benefits.


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