Table of Contents
- 1 Which insured persons benefit?
- 2 The conditions
- 3 The purchase of each notional year. This contribution is typically paid in a lump sum, though some pension funds may offer installment payment options. It’s important for employees to evaluate their financial situation and consider any potential impact on their overall retirement planning before making the purchase. Additionally, potential tax implications should also be taken into account when deciding to invest in notional years of insurance.
One in two insured persons turn to the help of fictitious years of insurance in order to retire or even establish a higher level of earnings.
According to the official data of EFKA, the applications for recognition of fictitious years of insurance are increased within 2024, as are the applications for retirement. See here who is interested in buying fictitious years
It is clear that the insured are looking for ways to retire five or even seven years earlier, or to complete the necessary 40 years of insurance if they have already reached the age limit.
Which insured persons benefit?
As a rule, the old insured people – before 1993 – benefit, as by adding notional time they can formulate more favorable retirement conditions from the EFKA.
On the contrary, the young insured – after 1993 – (for whom the time for retirement has not yet arrived) take advantage of the fictitious but only to reach the age of 40 and get a pension at the age of 62, instead of waiting for 67the year of age.
The conditions
The fictitious years of insurance can be used in order to complete the following pension conditions:
- The 40 years, in all funds at any time from old and new insured.
- 35 years in IKA, OAEE, ETAA until 2012.
- 25 years in the State until 2010.
- The 25 years in the State for 2011 and 2012 as well as the 36 or 37 years after 2012.
- 21 and 23 years in the State for parents with three children in 2011 and 2012.
- The 25th year until 2012 in DEKO or bank funds for mothers.
- The 5,500 days of insurance until 2012 for mothers with a minor child.
The cost: Employees for each month of redemption will have to pay a contribution equal to 20% of their salary. In cases of unemployment, part-time employment, the acquisition cost is calculated with a contribution of 20% of the respective minimum wage. With the minimum wage at 830 euros, the minimum cost of purchasing virtual time is 166 euros per month.
For freelancers and farmers each month of recognition costs as much as the monthly contribution for the pension sector.
In the State, the purchase with a contribution of 20% on the salary is valid for applications submitted from 1/1/2020 onwards, For applications until 31/12/2016, the cost is 6.67%. In 2017 applications the cost is 10%, for 2018 it is 13.34%, and for 2019 16.67%.
The application for the recognition of fictitious time can be submitted either before retirement or with the application for retirement. The purchase of fictitious time can be paid either in one lump sum or in installments by the insured if it is done before retirement. Even with withholding of 25% of the pension as long as the recognition is done together with the retirement application.
The limit: The maximum number of notional years that can be recognized by the insured is 7 years. These come from military service, unemployment, studies, time depending on children in the family, insurance gaps and illness. Notional benefits due to children are one year for the first child, two years for the second and 2 years for the third child with a maximum recognition limit of 5 years.
Source OT
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The purchase of each notional year. This contribution is typically paid in a lump sum, though some pension funds may offer installment payment options. It’s important for employees to evaluate their financial situation and consider any potential impact on their overall retirement planning before making the purchase. Additionally, potential tax implications should also be taken into account when deciding to invest in notional years of insurance.
Guest 1: Hello, my name is Alexandra, and I work as a financial advisor at an insurance company that deals specifically with pension plans and retirement benefits. I hope I can elucidate the various aspects of this article related to purchasing or acquiring notional years of insurance for retirement purposes. Please feel free to ask any questions you might have regarding this topic.
Guest 2: Sure, I’m John, an employee at a leading pension fund in Greece. Purchasing notional years of insurance has been quite popular among our clients, and I would also like to share my perspectives on the matter. Let’s start by discussing who stands to benefit the most from this practice.
Host: Excellent point! Guest 1, could you tell us about those who benefit the most from purchasing notional years of insurance?
Guest 1: Of course. In general, employees who have been contributing to a pension fund for a longer period, especially before 1993, tend to benefit the most from this practice. This is because they can potentially formulate more favorable retirement conditions by adding notional years to their actual years of service. On the other hand, younger employees who joined the system after 1993, but aren’t yet eligible for retirement, may purchase notional years to reach the 40-year threshold earlier and receive a higher pension payout.
Host: That’s interesting. Guest 2, what do you think about this trend? Do you see more younger employees investing in notional years to increase their pension benefits?
Guest 2: Absolutely, we’ve seen an increase in the number of younger employees inquiring about purchasing notional years. However, it’s crucial for them to understand that the cost of purchasing these years is based on their current salary, and it could be quite significant. Additionally, there’s a limit to the number of notional years that can be recognized, which is seven years in total.
Host: That’s a good point. Guest 1, can you elaborate on the cost and payment options for purchasing notional years?
Guest 1: Of course. Employees pay a contribution equal to 20% of their salary for
