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Pension cuts: Greeks need to live up to 101 to amortize social security contributions

Greek workers will need to live to be 1o1 years old in order to be able to amortize the social security contributions they paid during their working life. This is a very realistic estimation given the new Greek realities: increasing contributions and retirement age and part-time work and sharp pension cuts.

As things stand now, Greek workers would need to live to be 101 to get back the amount of contributions they paid over their working life.

People working for 25-30 years (some 10-15 years above the minimum pensionable period) will have to wait for up to 34 years after retirement at the age of 67 to get their investment back in monthly pensions, an unlikely prospect given that life expectancy in Greece is at 80-82 years.

The labor market has, as a result, resorted to the following: Soaring part-time employment with consent of employees; shrinking declared salaries to the minimum level allowed; and a reduction of the net profits of freelance professionals to the level of 586 euros per month, for the minimum monthly contribution of 158 euros.

The law introduced by former labor minister Giorgos Katrougalos basically punishes long-term employment and rewards minimum work effort in the name of the “welfare state,” offering employers and employees a huge incentive to stay off the books, Greek daily Kathimerini notes.

An investment of 100,000 euros to be amortized in 35 years? No financial consultant would advise you it is worth…

Should the insured person die earlier -given the life expectancy of 80-82 years – the “investment” will be depreciated or even dissolve in the air if the deceased has no surviving spouse.

Widows’ pensions are reduced to 50% from 75%. In cases, the widows are below 50, the widow pensions will not be paid for more than three years.

The new way of pensions calculation does not reward high insurance contributions paid over a long period of time.

Anyone who is insured for 20 years instead of 15 as the old regulation was, will take back his money after 16 years, if the pension is an average of 800 euros per month.

An insured person who will work for 20 years with a salary of 2,500 euros will have to wait 29 years to get back his money.

Deeper pension cuts are due as of 2019 – blame the new austerity package.

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One comment

  1. Maybe in the UK you will need to live to be 167 then to achieve the same?