BUSINESS

The unfairness of the revised pensions setup

ROULA SALOUROU

TAGS: Finance

The issue of the first 16,000 pensions based on the provisions of the 2016 law introduced by then social security minister Giorgos Katrougalos confirms that all pensioners can expect an average reduction of between 16 and 25 percent, reaching up to 50 percent in some cases.

At the same time, the figures reveal that this is an unfair system in actuarial terms, as the biggest cuts have been imposed on the people who as workers had paid the highest social security contributions. In contrast,  relative gains are in evidence among those with few years of contributions and low pensions.

In the case of a woman who collects a pension of 246.95 euros per month before tax and the 6 percent healthcare deduction, for instance, calculations show that if she returned the cash she has received and refiled her pension application so that this would be issued according to the Katrougalos law, she would receive a pension of 480.60 euros gross per month – i.e. almost twice the original.

On the other hand, a worker insured for 37 years, who should rightly get a monthly pension of 2,562.69 euros, receives just 1,338.60 euros per month based on the Katrougalos law. Had the same person retired before the law was voted in 2016, he would be getting 1,780.13 euros/month.
 

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