Changes to retirement age limits and pensions after 2027, due to the rapidly worsening demographic problem, are just around the corner. The existing legislation already provides for the review of the retirement age limits – from this year – in combination with the life expectancy in our country.
This fact, in connection with the dramatic effects brought about by the demographic problem on the insurance system, necessitates the additional measures, the taking of which is placed after 2027.
Already measures such as the increase of the general retirement limit, the extension of the working-insurance life and the reduction of the replacement rates are making their appearance in the public debate. The statements of competent government officials leave open the possibility of changes, which – however – they place after this particular year.
The measures for the insurance system came back up to date with the recent actuarial study of the National Actuarial Authority, which is described in the corresponding report of the European Commission.
The report basically put on the carpet the ominous demographic developments and their effects. The increase in life expectancy, combined of course with limited births and the aging of the population, has 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.
In 2040, for every 100 pensioners there will be only 125 insured persons
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 demographics. The report notes the possibility of reducing the pension replacement rate, which was in 2022 at 76% of income, to 65% in 2040 and 53% in 2070.
Indicative of the size of the demographic problem is the pensioner-employee ratio, which also shows the “health” of an insurance system. The normal – healthy ratio is 1 pensioner to 4 workers.
Today there is 1 pensioner for 1.66 workers and in 15 years it will decrease to 1.25 workers. This means that today for every 100 pensioners there are 166 insured persons in order to maintain pensioners’ benefits with their contributions. In 2040, for every 100 pensioners, only 125 will be insured to pay their pensions.
Correspondingly, in the year 2070 every 1 person over the age of 65 will correspond to 1 – maybe even less – person of working age, i.e. economically active.
The studies
Actuarial studies by Greek professors specializing in social security issues posed the dilemma of “shock measures or financing the system” with additional resources of 0.5% of GDP. The measures they mentioned raised – over a period of 40 years – the retirement age to 73 years, reduced pensions by 30% and increased social security contributions to 35% (for main and supplementary 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 the GDP or the implementation of nightmarish measures such as the reduction of pensions by 30%, the increase of retirement age limits at 73 years by 2070, the increase of contributions for the main pension from the current 20% to 27% and for the auxiliary from 6% to 8.1%.
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