Plans to increase pensions for retirees after more years of work

The Labor Ministry intends to correct a considerable distortion of the social security system that has resulted from the introduction of the Katrougalos law. Leading to unreasonably low new pensions, the law is an incentive for undeclared and low-paid employment.

The government has promised to make structural changes to the replacement rates, which determine the pension amount as a percentage of the average salary the retiree got. The most likely scenario provides for an increase in pensions for those retiring after more than 30 years of employment, and mainly those applying for a pension after 40 years of insured work.

According to experts the current legislation, named after former labor minister Giorgos Katrougalos, grants retirees pensions 107 percent of their average salary as long as they received low salaries; for just 20 years of work they would get pensions...