Pensioners set for another blow

Pension applications submitted after May 13, 2016 – after the so-called Katrougalos law was legislated – reveal significant cuts in pension payments.

According to the relevant data, five categories of pensioners will suffer cuts due to the new way pensions are calculated.

Overall, experts estimate that by the year 2020 some 200,000 retirees will receive pensions that do not correspond to the amount of money they contributed to the funds during their working lives.

In some cases, pensioners will receive 30 percent less than what they would have received had the Katrougalos law not come into effect. The overall reduction is estimated at 12 to 16 percent.

The hardest hit will be civil servants, especially those who have worked for more than 30 years and belong to the categories of University and Technological Education.

Other categories of pensioners that will be negatively impacted are those who made above-average contributions to the IKA social security foundation for more than 30 years.

Meanwhile, those who made medium or large contributions to the TEVE fund for the self-employed will also lose out. Others who can expect to be affected by pension cuts are people who contributed for 30 years to the retailer’ insurance fund (TAE) or the professional drivers’ pension fund (TSA).

The new pension system, however, will favor retirees with monthly gross earnings below 700 euros and less than 30 years of insurance – in line with the declaration made by former labor minister Giorgos Katrougalos that the new system would be classless and favor people with low incomes.

This category includes people insured for 20 to 30 years with IKA, who will retire with a gross remuneration of around 1,000 euros, or the former social security fund for professional drivers (TSA). Those insured at several public enterprises (DEKO) and bank funds will also be entitled to an increase in their pension because they pay very high contributions.