Wednesday , October 5 2022

Only with a 3-pillar system insurance is insured with reasonable benefits Greek economy



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The Greek Actuators Association (EAE) has put forward its proposal to create a second mandatory pillar of pension insurance that will operate in a funded manner, given that the coexistence of three pillars of insurance is necessary for a long-term viable system in our country. The EAE study, with four alternative scenarios, shows both the extent of the problem and the difficulty of finding easy solutions, as it appears that a significant period of high deficits is needed to allow the system to move to long-term economic viability with good benefits. This is because it compares with the insurance system deficits before the last two reforms in 2015 with the gradual abolition of early retirement and 2016 with a significant reduction in pensions through the law of disaster.

Then, according to the study presented, the deficit is drastically reduced, resulting in much lower deficits compared to the National Injury Mathematical Study in 2015 (although there is a recent study in 2018).
According to EOE Chairman Panos Demetriou, the union's belief that the retirement system should be a three-pillar system to be sustainable in the long run and to have a decent return.

According to a study by members of Hellenic Broadcasting Corporation Hp. Daskalopoulos and Leut. Zarkadoulas and Piraeus University student and G. Symeonidis, a member of the GSA, in the context of the functioning of the three-pillar system, it is possible in the long run to achieve a significant reduction in the financing deficit of the current state budget system while ensuring a decent level of pensions.

What has not been clarified is, of course, how to cover the cost of switching from an existing redistribution system, as is the case today, into a system where the second pillar of compulsory insurance works in a funded and complementary way to the first.

However, scientists believe that, in the long run, deficit reduction is taking place without affecting the adequacy of benefits, as the second pillar can bring benefits over the long term that will result in very high levels of compensation.
In the first pillar, the first two scenarios are in the context of imaginative capitalization and contributions are reduced to 10% or 15% (from today's 20%). Scenario 3 includes a national pension of € 400 (for 15 years of insurance) plus a share, while contributions are gradually decreasing by 1% over the next ten years, thus increasing contributions to the second pillar. Scenario 4 has a national income of € 500 per month and a five-year transitional downgrade period.

In the second pillar, contributions from 2018 gradually increase by 1% per year and reach 6% in 2023.

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