BUSINESS

Pension system changes afoot

A 12-member committee of civil servants, pension fund managers and professors was appointed on Thursday to propose reforms to Greece’s supplementary pension system, a second-tier system that ensures retirees an adequate income.

The plan is to change the supplementary pension system from a “defined benefit” to a “defined contribution” one, with contributions from both employers and employees, said Deputy Minister of Labor and Social Affairs Notis Mitarakis.

Each employee will have a corresponding account where contributions are saved and invested, and the accumulated capital will be converted into a pension income stream at retirement.

Mitarakis said these pensions would not be affected by fiscal considerations or demographics.

The new supplementary pensions are expected to concern employees who join the job market from January 2021 onward.

The committee has until October 4 to submit its report to Mitarakis.

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