FACTBOX-Greece’s pension reform bill

May 10 (BestGrowthStock) – Greece’s government approved on Monday a
bill aimed at reforming the country’s ailing social security
system, which is expected to go bust in less than 15 years if
left unrepaired. (For story, click on [ID:nLDE6492MV])

The reform is key for the consolidation of public finances
as Greece battles a debt crisis that has shaken the euro zone.

Here are some key facts on the latest pension reform:

– The statutory retirement age for women will be raised by
five years to 65 immediately to match the current retirement age
for men. The statutory retirement age for men and women will be
revised in 2020 to reflect changes in life expectancy.

– From 2014, pension benefits will be linked to GDP
fluctuations and the financial situation of pension funds.

– The government will introduce financial penalties and
disincentives for early retirement, aiming to raise the
effective average retirement age to 63.5 years by 2015 from 61.4
now.

– Early retirement below the age of 60 will be curtailed.
Employees can currently draw a pension below that age if they
have paid contributions for a certain number of years or have
children under 18.

– The government will review its list of “arduous”
professions, in which workers are entitled to special allowances
and can retire earlier than normal.

– It will also review terms and conditions governing
diability pensions and crack down on abuse.

– The 13 separate state-run pension funds will be reduced to
three by 2018 to generate savings.

– Unmarried or divorced daughters of civil servants, banking
employees and military staff will no longer be entitled to their
deceased parents’ pensions above the age of 18.

– Pension benefits will be reduced by basing them on
pensioners’ average pay over their working lives rather than
their final salary, which is usually much higher.

DETAILED AUSTERITY MEASURES

– The government has said it will freeze pensions in 2010,
2011 and 2012.

– Easter, Christmas and summer bonuses will be reduced for
pensioners receiving less than 2,500 euros a month and abolished
for those earning more.

– Those drawing a pension of more than 1,400 euros a month
will be subject to an extra tax ranging between 5 and 10
percent.

– The three above measures will generate savings totalling
some 3 billion euros by 2013, the government says.

PENSION DEFICIT, REFORM

Greece’s pension system, a political hot potato, has an
actuarial deficit estimated at about twice the size of the
country’s GDP of 240 billion euros ($322 billion).

The latest pension reform will be fully implemented in 2018
and the government has said it will guarantee the social
security system’s viability until at least 2030.
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(Reporting by Renee Maltezou, editing by Tim Pearce)

FACTBOX-Greece’s pension reform bill