Counter-incentives against early retirement

In a bid to reach a compromise with Greece’s creditors over controversial labor reforms, the government is said to be ready to propose measures for curbing early retirements by introducing financial counter-incentives as of 2016 for those who choose to leave work early. The key measure would be an increase up to 30 percent on the penalty that leads to reduced pensions.

Alternate Minister for Social Security Dimitris Stratoulis is also seeking to slash the number of voluntary exit programs in the public as well as the private sector. According to the proposal, enterprises – mainly banks and state corporations – would have to pay in advance all the revenue losses they would inflict on social security funds before they could launch a voluntary dismissal package. The government hopes this would serve as a counter-incentive and limit such practices.

The creditors’ representatives have also set very tight timetables regarding the increase of the so-called “intermediary” retirement age. If the changes apply from next year, at least 30,000 workers who are now able to retire before the age of 62 will see the age limit for retirement being increased.

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