New means of calculating it one time, which the Katrougalou legislation led to a discount, is being examined by the Ministry of Labor with the intention of its future enhance. The proposal into consideration issues the change within the methodology of calculation, as it’s purely worker contributions, which don’t have an effect on the price range and due to this fact don’t create any budgetary concern.
The proposal to vary the tactic of calculating the lump sum issues the extension of the five-year interval 2009-2013.
Change in calculation methodology
And it’s because the lump sum is decreased 12 months by 12 months in all Funds, as, with the modifications in the best way of calculating the quantities that retirees are entitled to from 2014 onwards, part of the lump sum has been transformed into an interest-free refund of contributions.
The proposal to vary the best way the lump sum is calculated is to increase the 2009-2013 five-year interval at the moment used to calculate one of the best a part of the lump sum to be nearer to retirement age. By extension, to rely the final 5 years earlier than retirement.
The measure is already on the desk of competent officers from the Public Welfare Funds, as it’s now established that the division of the lump sum into two components, one for the insurance coverage years as much as 2013 and one for the years from 2014 onwards, has an expiry date , as 12 months after 12 months the lump sum will lower for increasingly insured individuals, who will transfer away from the “good” 5 years.
It’s emphasised that the brand new lump sums are minimize by the Katrougalou legislation. The rule launched by this legislation 4387/2016 is that the lump sum for a similar years of insurance coverage is decreased yearly for many who retire from January 1, 2014 onwards. To ensure that the insured to even out the losses, they should keep extra years.
Double means
Specifically, the lump sum is calculated in a double means for many who retire in 2022. Specifically, an worker who completes 36 years of labor this 12 months will obtain a lump sum for 28 years based mostly on the previous calculation methodology and for the remaining 8 years, from 2014 after which, it can have an interest-free contribution refund.
The lump sum is decreased for the retirement years accomplished from January 1, 2014 onwards, as based on Legislation 4387/2016 the contributions paid from 2014 onwards to the welfare funds of the private and non-private sector are non-refundable.
With the change in calculation, an worker retiring in 2022 with 36 years will get two lump sums, the primary lump sum can be for the years as much as 2013 and can be calculated at 60% of the five-year common month-to-month earnings 2009-2013, for the insurance coverage years as much as 2013, and the second half would be the refund of the contributions you paid from 2014 to 2022, with out curiosity. It ought to be famous that the lump sum has no reservations, it’s paid in full. Withholding happens when there are:
a) money owed to the Tax Workplace (withholding of as much as 50% of the profit),
b) mortgage to the Deposit and Mortgage Fund (quantity based on the related mortgage settlement),
c) fee of contributions to the e-EFKA.
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