SOCIAL SECURITY

New auxiliary social security system in bill

new-auxiliary-social-security-system-in-bill

The bill on auxiliary pensions that Deputy Labor Minister Panos Tsakloglou presented at Wednesday’s cabinet meeting introduces the notion of the pay-as-you-earn (PAYE) system in social security. The bill will be put up for public consultation for about two weeks and then submitted for voting in Parliament.

With the new system, the contributions of workers will not be used for the payment of the auxiliary pensions of today’s pensioners, but will instead be saved in a personal account for each insured worker, to be invested and then returned along with their yield in the form of their auxiliary pension when they retire. This way, each worker’s contributions toward the supplementary social security will not be affected by the aging of the population.

All workers who start getting insured from January 1, 2022 will have to enter the new PAYE auxiliary social security system and the new fund (TEKA), while those aged up to 35 years will also have the option of joining it, even if they do not have any supplementary social security, such as self-employed professionals or farmers.

The state will guarantee a minimum auxiliary pension equal to the contributions paid.