Pension size in Greece. The pension in Greece is: Average pension in the world
Most experts are of the opinion that raising the retirement age is an effective step to overcome the consequences of the crisis in modern conditions. In an effort to test the method in practice, the population of EU countries, including Greece, began to massively implement the process of gradually increasing the retirement age.
Effective social insurance systems in many European countries are now bursting at all seams.
Until about 2005, Greece was considered the country where the wealthiest retirees live. They received 96% of their previous salaries and essentially maintained their previous lifestyle in retirement without working.
The average salary in Greece was 2,000 euros, and the retirement age began at 57 years. Having gone on vacation, pensioners had the opportunity to live without denying themselves anything: traveling around the world, purchasing real estate in other countries.
In the context of the economic crisis and events taking place in Greece itself, it turned out that the lion's share of GDP is spent on paying pension benefits. Taking into account the fact that the population is aging, it has become obvious that the government, along with other measures to overcome the crisis, needs to raise the retirement age.
The main reasons that prompted the state to adopt a law changing the retirement age:
- A sharp drop in natural population growth.
- Reduction in the number of working-age population.
- The outflow of the local population to other countries in search of high earnings.
- Increasing number of people of retirement age.
- High unemployment rate.
- Reducing wages.
- Reducing employer contributions to funds.
- Corruption is the plunder of insurance funds by officials.
Economists considered that, at a minimum, raising the retirement age to 65 years, and in the future to 67, would move the process of gradual collapse of the system as a whole off the ground. This will allow Greece to save 1 billion euros annually.
The issue of paying real pensioners has worsened in the country to the point that the government was forced to reduce the amount of pensions by more than half. Pension costs today average 500 euros.
This measure reduced costs, but did not solve the problem globally, so the issue of raising the age limit was brought up for discussion by the legislative branch of the new Greek government.
What does the pension system look like in Greece?
There are several sources of social insurance in Greece:
- The ICA Fund is the largest state insurance fund.
- The Regional State Administration Fund provides insurance under the auspices of the state not only of the local population, but also of people from other countries.
- Fund for civil servants.
Funds were also created to accumulate funds from individual professional fields - doctors, lawyers, engineers, sailors, etc. Conditions provided by the funds:
- Payment of pension benefits in accordance with contributions.
- Free health care in retirement.
- Providing free medicines.
- Free flight to your holiday destination once a year.
Each fund is responsible for accumulating funds for a separate category of workers, therefore the funds deposited in them differ depending on the level of wages and profitability of enterprises. But the conditions of all policyholders are almost identical, so most people chose a fund to accumulate funds based on territorial characteristics.
The entire system is based on mandatory payments made by the employee and the employer. Under the law, the size of the future pension is determined based on the total amount of contributions. In addition to paying labor pensions, the funds must pay benefits to disabled people and families with the loss of a breadwinner.
In the context of the crisis in the country, the state stopped regular support for pension insurance, so their costs increased and revenues decreased. A new pension law was adopted in Greece in 2015, which outlined new insurance conditions and described the procedure for gradually increasing the retirement age.
According to experts, the new complicated insurance system in the country will lead to raising the age limit for different groups of people from 2 to 7 years. Those who joined the system after 2005 will be the most disadvantaged by the reform, since a short period of deduction will have a decisive effect on calculating the size of their future pension.
For now, the result of raising the age limit should be the number 67. The pension period has been increased by another 15 years and a very detailed pension formation scheme has been developed, which depends on many factors:
- Beginning of the insurance period.
- Work experience.
- Total investment amounts.
An innovation in the law is the gradual equalization of the retirement age of men and women.
Until 2021, Greece plans to gradually increase the age to 65 years, and from 2024 changes will be made to the law, which will also depend on statistical data on the life expectancy of the country's citizens.
The state took upon itself the obligation to support the funds financially, and left the formation of the basic part entirely to itself.
Most experts are of the opinion that raising the retirement age is an effective step to overcome the consequences of the crisis in modern conditions. In an effort to test the method in practice, the population of EU countries, including Greece, began to massively implement the process of gradually increasing the retirement age.
On the problems of the pension regime in Greece
Effective social insurance systems in many European countries are now bursting at all seams.
Until about 2005, Greece was considered the country where the wealthiest retirees live. They received 96% of their previous salaries and essentially maintained their previous lifestyle in retirement without working.
The average salary in Greece was 2,000 euros, and the retirement age began at 57 years. Having gone on vacation, pensioners had the opportunity to live without denying themselves anything: traveling around the world, purchasing real estate in other countries.
In the context of the economic crisis and events taking place in Greece itself, it turned out that the lion's share of GDP is spent on paying pension benefits. Taking into account the fact that the population is aging, it has become obvious that the government, along with other measures to overcome the crisis, needs to raise the retirement age.
The main reasons that prompted the state to adopt a law changing the retirement age:
- A sharp drop in natural population growth.
- Reduction in the number of working-age population.
- The outflow of the local population to other countries in search of high earnings.
- Increasing number of people of retirement age.
- High unemployment rate.
- Reducing wages.
- Reducing employer contributions to funds.
- Corruption: plunder of insurance funds by officials.
Economists considered that, at a minimum, raising the retirement age to 65 years, and in the future to 67, would move the process of gradual collapse of the system as a whole off the ground. This will allow Greece to save 1 billion euros annually.
The issue of paying real pensioners has worsened in the country to the point that the government was forced to reduce the amount of pensions by more than half. Pension costs today average 500 euros.
This measure reduced costs, but did not solve the problem globally, so the issue of raising the age limit was brought up for discussion by the legislative branch of the new Greek government.
What does the pension system look like in Greece?
There are several sources of social insurance in Greece:
- The ICA Fund is the largest state insurance fund.
- The Regional State Administration Fund provides insurance under the auspices of the state not only of the local population, but also of people from other countries.
- Fund for civil servants.
Funds were also created to accumulate funds from individual professional fields - doctors, lawyers, engineers, sailors, etc. Conditions provided by the funds:
- Payment of pension benefits in accordance with contributions.
- Free health care in retirement.
- Providing free medicines.
- Free flight to your holiday destination once a year.
Each fund is responsible for accumulating funds for a separate category of workers, therefore the funds deposited in them differ depending on the level of wages and profitability of enterprises. But the conditions of all policyholders are almost identical, so most people chose a fund to accumulate funds based on territorial characteristics.
The entire system is based on mandatory payments made by the employee and the employer. Under the law, the size of the future pension is determined based on the total amount of contributions. In addition to paying labor pensions, the funds must pay benefits to disabled people and families with the loss of a breadwinner.
In the context of the crisis in the country, the state stopped regular support for pension insurance, so their costs increased and revenues decreased. A new pension law was adopted in Greece in 2015, which outlined new insurance conditions and described the procedure for gradually increasing the retirement age.
According to experts, the new complicated insurance system in the country will lead to raising the age limit for different groups of people from 2 to 7 years. Those who joined the system after 2005 will be the most disadvantaged by the reform, since a short period of deduction will have a decisive effect on calculating the size of their future pension.
For now, the result of raising the age limit should be the number 67. The pension period has been increased by another 15 years and a very detailed pension formation scheme has been developed, which depends on many factors:
- Beginning of the insurance period.
- Work experience.
- Total investment amounts.
An innovation in the law is the gradual equalization of the retirement age of men and women.
Until 2021, Greece plans to gradually increase the age to 65 years, and from 2024 changes will be made to the law, which will also depend on statistical data on the life expectancy of the country's citizens.
The state took upon itself the obligation to support the funds financially, and left the formation of the basic part entirely to itself.
Retirement age in Greece in 2017
Local pensioners lived happily ever after - elderly Greeks received 80-85 percent of their previous salaries, and maximum pensions were around 2,000 euros per month (average - about 1,400 euros).
At the same time, in the caste of civil servants, inflated to monstrous proportions, the retirement age began at 58 years, and many categories of Greek pensioners received payments themselves thirteen or even fourteen times a year. But the generosity of the pre-crisis pension system in Hellas was not limited to this - many pensioners, in full accordance with the letter of the law, received not only their pension for life, but also payments for their husbands who had previously passed on to another world.
Since Greece's entry into the eurozone, the “socialist” life of pensioners has been largely ensured through state support for pension funds, which is why the budget deficit has constantly increased.
And one of the first ultimatums from international creditors to Athens after the start of the Greek economy was the implementation of a large-scale pension reform.
Lenders said to cut back...
As a result, after several rounds of pension cuts in Greece at the request of the European Union and the International Monetary Fund, by 2015 its average amount dropped to 882 euros per month, in 2016 to 750, and in 2018 to 720 - half as much as ten years ago. At the same time, six out of 10 Greek pensioners, or 1.2 million people, currently receive payments below 700 euros. It is possible that in 2019 the average pension will fall even lower.
Such a radical “cut” in pensions turned out to be extremely painful for the elderly. However, in the context of a rapidly aging population, increased life expectancy and chronic problems with demographics - by 2020, every third Greek will be a pensioner over 65 years old - there is simply no other way.
The total reduction in pensions affected all categories of Greek pensioners, including former military personnel. Thus, if in pre-crisis times high-ranking officers received up to 3,000 euros per month upon dismissal from the army, today their income has fallen to 1,420 euros.
...and "raise"
In parallel, under pressure from the Eurogroup - the council of finance ministers of EU countries - the Greek government under the leadership of Alexis Tsipras, despite desperate protests, rallies and trade union strikes, passed through parliament a package of laws to increase the retirement age in the country. Currently, both men and women can retire at age 67, and the mandatory length of service to receive an old-age pension is set at 33 years. The alternative age for receiving a pension in Greece is 62 years, but in this case the length of service must be at least 40 years.
You can stop working earlier, however, in this case, payments from the state will be significantly reduced, and those who retired at the age of 50-55 will lose the most.
The minimum state pension in 2019 will start at 384 euros, which more or less corresponds to the subsistence level. Moreover, we cannot count on indexation of this amount in the near future - at the request of the European Commission, the amount of pensions is frozen until 2021. Those who have paid contributions to insurance funds for at least 15 years will receive a state pension.
What do Greek pensioners do?
In a country with a wonderful climate, where, as we know, there is everything, even with a repeatedly cut pension, you can enjoy life without any problems. What, according to the observations of the RG correspondent, is what elderly Greeks actually do - leisurely drinking coffee during the day, and in the evenings moving to noisy local taverns to socialize over interests.
At the same time, in the context of the protracted economic crisis in Greece and high unemployment (up to 22 percent in the country and about 50 percent among young people), pensions of the elderly have become a serious help for young unemployed Greeks. According to research, today 52 percent of Greek households live on the pensions of older family members.
It seems to contemporaries that a pension, as such, or some kind of benefit under a different name, has existed at all times. How else can the elderly and disabled survive?
It turns out not. It appeared in Germany thanks to the policies of Chancellor Bismarck.
What was the first pension?
This happened in 1889. The pension was intended for workers and employees who lived to 70 years of age. And here was the trick: the life expectancy of Germans at that time was on average 45 years, so only a few could benefit from pension support. People even came up with a biting name - “pension for the dead.”
Nevertheless, this payment for the elderly was considered universal and obligatory. If a person died before reaching the age of 70, all the money intended for him remained in the state treasury, and this benefit was also intended from the beginning.
West and Russia - pension reforms
Funds for the pension treasury were allocated from the labor earnings of the population.
In general, the emergence of the pension system in Germany was primarily associated with an acute demographic problem. And then it developed in this country, pursuing the main goals: increasing the birth rate, preserving the nation.
Many years later, Hitler, who came to power, was concerned about the same issue. And at the same time maintained pension payments
Pension in Germany in the 20th century
For almost a century, the German pension system operated according to the principles laid down by Bismarck. And only in 1953, Federal Chancellor of the Federal Republic of Germany Adenauer began to reform it. First of all, the retirement age was reduced to 65 years. And secondly, a “generational solidarity agreement” was developed, which redistributed the amount of deductions from workers and entrepreneurs in favor of the elderly and children.
The pension system still operates in this form in Germany. The proportions of deductions have also been preserved: 50% from workers, 50% from entrepreneurs.
Today the state pays pensioners an average of 1,270 euros. The highest amount is
2200 euros. If a person of working age was unemployed or earned
was small, he is paid the difference between the generally accepted pension size and the subsistence minimum. In addition, the state covers utility costs.
Everything would be fine, but, according to sociologists and politicians, in the near future the unresolved demographic problem will lead to the fact that there will be no more than 25 million Germans left, and half of them are people over 65 years old.
Which European countries have the highest pensions?
Nowadays, in developed European countries, a funded-distribution pension system is used. This model has allowed many states to provide fairly high pensions. Below are the top ten countries with the highest pensions.
10. Czech Republic
In this country, men become pensioners at 61, women at 58.
They receive a pension in half the amount of their salary. And the average salary in the Czech Republic is 1,000 euros.
9. Portugal
Portuguese pensioners receive approximately 54% of their previous wages. And this is more than 500 euros with an average salary above 1,000 euros.
8. Finland
58.4% of the salary level is the size of the pension of a Finnish pensioner. The average salary in the country is 3.7 thousand euros, but in order to calculate the amount of the pension, taxes and other payments must be deducted from the salary.
7. Slovenia
The right to a pension for Slovenian citizens begins at age 63 for men and at age 61 for women.
They receive about 62% of their wages.
6. Türkiye
This country has a rather humane attitude towards retirement age: men complete their careers at 60, women at 58. In addition, mothers of five or more children can become pensioners at 48. The average salary in Turkey is about 900 euros, and the pension is 64.5% of this amount.
What is the average salary in Germany? Do you know which area of the state makes the most and the least amount per hour? If not, read our article
5. Italy
In Italy, women and men become pensioners at the same age - 59 years old. The pension is 65% of the average salary of 2.3 thousand euros.
4. Austria
Depending on their gender, Austrian citizens retire at 65 or 60 years of age. In this country, average salaries are high even by European standards - 2.7 thousand euros. And the pension is assigned in the amount of 77% of wages.
3. Spain
Spain is among the three leaders in pension provision for citizens who retire at 65 years of age. The state provides them with a pension in the amount of 81% of their salary. The average salary in the country is 2.2 thousand euros
2. Luxembourg
In this small European country, pensioners are surrounded by care. Having registered their new status at the age of 60, they have the right to count on payments in the amount of 87% of their previous salaries. The average salary (excluding insurance fees and taxes) is 4.3 thousand euros!
1. Greece
The wealthiest pensioners live here, receiving 96% of their previous salaries! The average salary in Greece is 2.1 thousand euros. And at the same time, people become pensioners at 57 years old. It turns out that when they retire, they practically retain their usual way of life.
Lowest pensions in Europe
- 1. Bulgaria - 125 euros;
1. Romania - 175 euros;
2. Lithuania - 222 euros;
3. Estonia - 232 euros;
4. Latvia - 304 euros.
Russia
As for our country, all the pension reforms have not made the elderly richer. True, Russian pensioners retire earlier than in most European countries: at 60 for men and at 55 for women.
The average pension in Russia is 40% of the average salary or 11,600 rubles, and translated into euros at the current exchange rate it is 196 euros!
By the way, after these figures, you can look at the average oil production by country in order to more clearly understand - what about pensions?
Video - pension and raising the retirement age in Russia:
