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Greece needs contributions by 10 workers to pay just one pension

We saw it coming when wages in Greece started to plummet. Now the data obtained by social security experts confirm it: A lot of people need to work in order to pay one single pension.

  • It takes the contributions of ten workers to pay one single pension.

Before the crisis it required the contributions of four workers.

The constant decline in salaries and the rise of flexible forms of employment are undermining the sustainability of the country’s social security system despite the numerous interventions in terms of pensions.

According to social security experts, the slide in the average salary means that it now takes the contributions of 10 workers to pay one pension; before the crisis it required the contributions of four workers.

The deterioration of that ratio highlights the system’s viability problem. The main feature of that problem is that the contributions of today’s workers go in their entirety toward covering the pensions of today’s pensioners.

According to data from the new Single Social Security Entity (EFKA), the analysis of employers’ declarations from May 2016 showed that the average salary of 1.4 million workers with full employment amounted to 1,176 euros per month. The average monthly gross earnings of the 588,000 part-time workers amounted to just 394 euros; their number increased by about 11 percent from a year earlier.

The same data show that bigger enterprises pay higher salaries: Businesses with fewer than 10 employees have an average full-employment salary that amounts to just 58.9 percent of that paid to employees of companies with more than 10 workers.

The 10 workers : 1 pension rate is, of course, just an average.

Think how many workers at €394 gross are needed for the €1,000 pension of a retired public servant or the €2,200+ pension of a bank employee.

 

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One comment

  1. As I said, the party is just getting started!
    Just wait a few years down the line what happens to GR. Even if it goes Drachma, they have to print a lot of money to pay all that!