Major shifts in the pipeline for pension calculation methods

Major shifts in the pipeline for pension calculation methods

Over 4 million workers and pensioners insured with the country’s main and auxiliary social security funds (EFKA and ETEAEP) can expect to see changes and shifts in their pensions and incomes judging by the blueprint the Labor Ministry is expected to send to the General Secretariat of the government on Wednesday, before heading to Parliament.

In the meantime it is set to be put up for public consultation, while the new social security law, the “Vroutsis law” (named after the labor minister), will have replaced the clauses of the Katrougalos law deemed unconstitutional by mid-February.

The final version of the plan was sealed yesterday and concerns the new replacement rates on which the pensions will be based.

Kathimerini understands it will provide for increases for workers with over 30 years of insured labor, so that the total replacement rate will marginally exceed 50 percent after 40 years of labor.

The structure of the pension calculation system will remain the same, but the replacement rate will grow from the current level of 27.79 percent for 31 years of labor and 42.8 percent for 40 years of insured work.

There are no changes provided for the calculation method for auxiliary pensions. The hikes expected to reach some 300,000-320,000 pensioners will concern those who suffered the cut resulting from the Katrougalos law in the summer of 2016 when a cap of 1,300 euros per month was imposed on the sum of the main and auxiliary pension for each retiree.

According to calculations, the pensioners to benefit will see hikes ranging from 5 euros to 196 euros per month, for an average increase of 99.57 euros per month.

Sources also say the penalty on pensioners who also work will be halved from 60 percent to 30 percent, meaning that the monthly pension for those people will grow by 75 percent.

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