Hatzidakis: New bill for supplementary pensions a reform for the younger generation

The draft legislation reforming the supplementary pension system, which is to be voted on at the end of next week, is a reform for the younger generation, Labour and Social Affairs Minister Kostis Hatzidakis said in an interview published in the newspaper ‘Realnews’ on Sunday.

He said that the draft bill, which introduces a capital-funded pension scheme for those entering the workforce from January 1, 2022 and for existing workers up to 35 years old who choose to join it, without any change in the amount of their contributions.

“With our intervention we are attempting to change the conviction of young people that the pension system is something that is irrelevant to them, that their contributions are lost and that they will never receive a pension. For this reason, we are gradually adopting the logic of a personal ‘account’ for every young person, where their contributions are saved, invested and the sum that arises from this will shape their supplementary pension,” the labour minister said.

He noted that this system already exists in countries such as Sweden, Denmark and the Netherlands, where it was shown that it could lead to increases in supplementary pensions ranging from 43 pct to 68 pct.

The minister clarified that nothing would change for older members of the workforce, while he rejected criticism from main opposition SYRIZA-Progressive Alliance that the government was gambling with the contributions of future pensioners.

“There is an absolute guarantee in the draft bill that, even in the unlikely event that things go wrong in the markets, the new insured will receive their contributions plus inflation,” he pointed out.

Deputy Labour Minister Panos Tsakloglou, in an interview with the newspaper “Kathimerini”, highlighted the benefits in terms of reducing contribution evasion, since the bill would provide a strong incentive to pay into the system by linking pensions with the contributions paid in.

“At the same time, the benefits from restricting uninsured labour will much greater, both for the economy and for our social insurance system,” he said.