Shock measures for the insurance system due to the rapidly worsening demographic problem are just around the corner. The dramatic effects of the demographics on the insurance system accelerate the necessary additional measures, the taking of which is – now – after 2027.
Measures such as increasing the general retirement limit, extending the working-insurance life and reducing replacement rates are already appearing in the public debate, with the government “committing” only for the period up to 2027. The statements of competent government officials factors leave open the possibility of changes after the given year.
The nightmarish measures for the insurance came back into the news with the actuarial study of the National Actuarial Authority, which was used in the corresponding report of the European Commission.
Implications
The report basically put on the carpet the ominous demographic developments and their effects. The increase in life expectancy combined with the limited births and the aging of the population have as a direct result the increase in the retirement limit.
The report mentions for our country the possibility of the statutory retirement age increasing to 67.5 years from the current 62 years – with 40 years of insurance. In the interim and until 2030, it is proposed to increase the current age limit of 62 years with 40 years of insurance to 63.5 years.
At the same time the general age limit, which is currently 67 years, may reach 68.5 years in 2030 and 72.5 years in 2070.
The amount of the pension is not unaffected by the effects of the Demographic Index. The report notes the possibility that the pension replacement rate, which was in 2022 at 76% of income, will be reduced to 65% in 2040 and 53% in 2070.
Studies
The dilemma of shock measures or financing the system with additional resources of 0.5% of GDP had been posed – since previous years – by actuarial studies by Greek professors specializing in social security issues.
The measures they mentioned raised the retirement limit to 73 years by 40 years, reduced pensions by 30% and increased the insurance to 35% (for main and auxiliary pension).
The specific studies estimated that in order to cover the effects of the demographic problem, there are two alternative scenarios: either the financing of the system with additional resources of 0.5% of GDP, or the implementation of nightmarish measures such as the reduction of pensions by 30%, the increase of the retirement age limits at 73 years by 2070, the increase of contributions for the main pension from 20% which is currently to 27% and for the auxiliary from 6% to 8.1%.
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