The Greek government’s proposal on the anticipated reform of the pension system leaked on Monday, with most of the burden falling on incoming pensioners rather than the current ones.
The 170 page proposed legislation includes significant changes in the calculation of new pensions. Payments will be now based on the average income earned throughout one’s working life. New pensions for people who have worked for around 40 years will cover approximately 60% of the average income that they earned over these 40 years.
New pensioners who would receive more than 750 euros of monthly pension payments will see that reduced by 15%. Pensions above 2,000 euros will be reduced by 30%. Pensions above 3,000 euros will be cut to 2,200.
If the legislation passed in its current form, all the various public pension funds will be consolidated into one new single fund.
The proposed plan will be sent to Greece’s creditors later on Monday evening.
Greek Political Parties React
Labor Minister Giorgos Katrougalos met with political party leaders on Monday to inform them about the plan. The responses were not favorable to the government.
New Democracy’s interim president Yiannis Plakiotakis claimed that Greek Prime Minister Alexis Tsipras is looking for consent to make a mistake and noted the party will express its position in the parliament.
Union of Centrists President Vassilis Leventis questioned the government’s approach in protecting current pensioners while burdening future ones.
He also wondered why citizens with 3,000 euro pensions will still be receiving 2,200 euros while farmers are being paid 300 euros each month and there are two million unemployed.
PASOK President Fofi Genimmata claimed PASOK will not cooperate in passing these reductions or increasing contributions to social security payments.
Greek Communist Party (KKE) president Dimitris Koutsoumpas rejected the plan and accused the government of behaving like its predecessors.
Stavros Theodorakis, the President of “To Potami” party outright refused to meet with Katrougalos and accused him of setting up the meetings simply for show.