The reforms of the law on employment and the pension system, which raised a huge wave of reactions from opposition parties and trade unions in recent months, are on their way to the parliament. Minister Andreas Loverdos will inform the Social Affairs Committee at the parliament at 5 pm, while the bill is expected to be introduced as early as Friday.
The Financial Minister George Papakonstantinou presented at a press conference yesterday the main points that are associated with equalizing the age limits for retirement of men and women and the calculation of pensions. Serious changes will be made for mothers of under-aged children. The retirement age for them increases by 15 years and the needed years to ensure their retirement jumps from 17.5 to 25 years of service.
The Ministry stressed that these changes are the result of the judgment of the European Court on Greece, which decided the age requirements for retirement of men and women to be aligned. This will affect approximately 150 000 women working in the public sector.
In detail, pensions will not be given before the age of 60 years. Even reduced pensions are adjusted to this age limit and the difference in retirement years for the parents of more than three children is no longer valid. Pensions for unmarried daughters of civil servants will be abolished too as the law will make an exception only for daughters unable to work and for those that study at a university.
The changes in the law will not affect civil servants who this year have gained the right to retire or already have that right. The purpose of the ordinance is to prevent state employees “escape” to retirement, which will lead to a complete collapse of the pension insurance funds.
Radical changes will occur in the method of calculating pensions from 2015 onwards, when an uniform system for calculating the pensions of employees in the public and private sectors will be introduced. There will be basic and analogue pension. The analogue pension will be calculated on the base of contribution of the individual to the insurance funds and will correspond to 48% of the salary for 40 years of experience, and the basic pension will be equal for all – it is € 360 now. As a whole, the full pension of civil servants will be equal to 75% -80% of the salary they have been receiving. Currently there are extreme cases of pensioners who have worked in the public sector and after the calculations the pension they receive is even 110% of their salary for 35 years of experience. So the losses in these cases are estimated to reach 30 %. Furthermore, pensioners receiving more than € 1,400 pension will be subject to the LAFKA tax from August 1, which is equal to 3% to 9% depending on the size of their pension.
The union of the Communist Party announced a strike against the reforms of the bill for tomorrow, in which builders, pharmaceutics, employees of clothing and other factories will take part. The next big demonstration is expected on June 29when the two unions – ADEDY and GSEE, announced for 24-hour strike and protest rally against the changes in the pension system.
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