- Funding Programme
- Structural Reform Support Programme (SRSP)
Implementation of the Greek Auxiliary Pension System Reform
The European Commission expects the project to have a long-term impact on the ground, by supporting Greece in addressing the current deficiencies of the auxiliary pension system, with the implementation of a new, defined-contribution scheme.
In Greece, the main pensions from the first pay-as-you-go pillar are complemented by auxiliary pensions, which are mixed Defined Benefit (DB)/Notional Defined Contributions (NDC) schemes. As a result, the Greek pension system is vulnerable both to demographics and to economic crises, as retirement benefits are financed by social security contributions levied from the current workforce. The reform is expected to address demographic and fiscal vulnerabilities of the existing auxiliary pension system, improve coverage, and ensure increasing returns from investment both for the insured population and the national economy.
The support measures are:
- Proposal on the structural/administrative reform of the Greek Auxiliary Pension System and development of an action plan for its implementation, namely establishing a Hellenic Auxiliary Pensions Defined Contributions Fund (TEKA) devoted exclusively to the DC system.
- Support to the preparation of legal texts (ministerial decisions and circulars) derived from the legislation, with a view to design and set up the legal, investment and supervisory framework for the new TEKA function.
- Support to the design of an IT strategy and the preparation of technical specifications HR development, including the definition of staff-related requirements, job descriptions and new Standard Operating Procedures (SOPs).
- Development of training modules (concerning new business processes, new SOPs and financial issues) and provision of training to key staff on a “train the trainers approach”.
- Development of a methodology of monitoring the implementation of the submitted strategic action plan of the new TEKA.
- Implementation of the policy reforming the auxiliary pensions to a defined contributions system, for new entrants in the labour market as of 1 January 2022;
- Increase of the average auxiliary pension by 20-30% (government estimates);
- Establishment of the Hellenic Auxiliary Pensions Defined Contributions Fund (TEKA) dealing directly with the implementation of the new policy for entrants in the labour market;
- Capacity-building in TEKA to support and undertake the implementation of the reform will take place.
- The project`s ultimate result would be the transformation of the auxiliary pension system, rendering it more sustainable, safe and adequate.
More about the project
The Hellenic Auxiliary Pensions Defined Contributions Fund
Ministry of Labour and Social Affairs of the Hellenic Republic