Millennials will have to work longer than their parents for a much smaller pension in Greece as well as in most other countries in the Organization for Economic Cooperation and Development, a study by the Paris-based OECD has found.
Recording changes to member-states’ pension systems in the past few years, the study points to a combination of rising life expectancy and rapidly aging populations as one of the key drivers behind adjustments to retirement ages and replacement rates that determine the size of the pension.
Like other member-states, Greece has raised the retirement age from 60, which applies to today’s pensioners, to 62, which will be the earliest young people born in the 1990s can expect to give up employment. It also slashed the percentage of their salary they can expect as a pension from the current level of 70.6 percent to 53.9 percent in the long term, with those leaving the work force in the next few years set to receive 62.8 percent of their salary after retirement.
Greece, the OECD said, is among the countries with the biggest reductions in the replacement rate, coming to more than 15 percentage points. Future pensioners will also have to live on this reduced income for longer, as the period of retirement is seen representing 39.4 percent of their adult life, against 39.1 percent for those born in the mid-1950s and 35.6 percent for those born in 1940.
The average retirement age among OECD countries is 64.2 years old today, rising to 65.8 for those born in 1996, with the organization estimating a further rise to 67.2 for people born in this decade.