New social security draft law provides great pension cuts for new pensioners

The new social draft law presented by Labour Minister Giorgos Katrougalos provides a 15% reduction in pensions over 750 euros for new pensioners

According to estimates, for about 40 years fully insured, the replacement rate is set at 60% of pensionable salary, while the new draft law abolishes the previous gross pension calculation.

The new way of calculation is based on the contributions paid for all working years, while lower rates of calculation will be applied.

According to former minister Giorgos Koutroumanis, this means that pensions over 2,000 euros will be reduced by up to 30%.

That is, if an employee’s monthly salary was 2,500 euros in 2011 and now is 1,000 euros, he will get half of the pension he would normally expected to receive.