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New pensions bill applies the method of carrot and stick

11 May 2010 / 11:05:56  GRReporter
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Incentives to employees to keep their jobs gives the new law on pension system under which the best solution is not to retire before 37 years of experience. Pensions, which will be paid after 2013 are quite reduced and domestic helpers, can be insured through the innovation of "labor tickets" or ergosima

Yesterday the Council of Ministers approved a new bill for social security, on which the government has been working since the beginning of its mandate, which was presented by Labor Minister Andreas Loverdos and his deputy George Koutroumanis. 

The main reforms that the bill presents are: 

From January 1, 2018 a minimum basic pension will be established (€360 in 2010). The basic pension would be given before the age of 65 years under set conditions. To take this pension foreigners must have lived in the country for at least 15 years between their 15th and 65th birthday. 

Insured for the first time on January 1, 2013 and on, will be entitled to a pension after January 1, 2018 and will be entitled to analogical amount based on the time during which they were insured, which cannot be shorter than a full year or 300 working days after their 65th birthday – the age limit for retirement if the time during which the employee was insured is shorter than 15 years and 4500 days paid insurance, is fixed at 65 of age. 

From January 1, 2011 a new law will be applied, which was presented by former Labor Minister Fani Petralia, according to which the age limit is increased from 58 to 60 years for retirement for those who have started their social security from 1983 onwards. From 2011 age limit will be increased with one year - from 50 to 51 years for mothers of minor children and it must reach by stages to 55 years. Next week the Minister of Finance will present a plan for balancing (increasing) of age limit for retirement of women workers in the public sector, who are not going to retire this year. 

New list of heavy and harmful professions will be in effect for those who are insured after July 1, 2011, and at the same time a control center for disability pensions will be created. For domestic helpers and other activities a "labor ticket (ergosimo) is created, which will be in the form of a check for a certain amount, which includes the amount of wages and the amount of pension contribution. 

All insured will be allocated to five funds – fund for staff on salary, for self-insured individuals, for researchers, for farmers and for employees in the media. 

Incentive to remain at work after age 35 years of experience is that the pension increases by 2.5 percent per year with a full range of insurance or 300 working days until 37 years of work experience. 37 years to 40 years of work experience increases the basic pension with 3.5 percent. The public sector introduces a penalty of 6% reduction of pension if the employee chooses to retire early, which will be valid from January 1, 2011.

On the occasion of the reforms in the pension system for civil servants the union ADEDY organizes a protest on May 12 at 06:00PM at Klavtmonos Square in Athens.

Tags: Greece politics economy reforms social security pensions
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