Major cuts to pensions

The pensions of some 70,000 Greeks who can retire within 2017 will be reduced by up to 20 percent.

Experts note that although the law introduced by former labor and social security minister Giorgos Katrougalos provides for those who retire up until 2018 to receive a bonus to ease the blow from the transition to the new system, the vast majority of workers who retire this year will not benefit from it, as the law only concerns those who are subject to a reduction in excess of 20 percent.

The new pensions will effectively comprise three parts. The first concerns the national pension, which amounts to 384 euros per month if it is a full pension based on age or disability with at least 20 years of service. The second part will be based on each worker’s salary from 2002 until retirement, including Christmas, Easter and holiday bonuses. The third part will constitute the so-called “personal difference” – the gap between the pension as calculated according to the old method and that using the new calculation system.

If that personal difference is more than 20 percent, a third of it will be returned to the pensioner, while if it is up to 19.99 percent, then the pensioner will have no choice but to accept the entire cut.

Deputy Minister for Social Security Tasos Petropoulos has admitted that the first batch of recalculated pensions, amounting to 10 percent of the whole, showed personal differences of 20 percent. of the second review without any further delays is of vital significance to avoid a fresh deterioration in the domestic economic climate and to maintain expectations for the possible inclusion of Greece in the European Central Bank’s quantitative easing program,’ Eurobank warns.