Greece Offers Pension Overhaul Plan

Greece this week unveiled a pension reform plan containing sweeping changes, including benefit cuts and higher contributions from both employees and employers.

A reform initiative that delivers savings equal to 1 percent of the country’s GDP is required as part of Greece’s $93 billion bailout.

Details of the plan, from Reuters:

The proposed overhaul of the pension system, which has been a drag on the budget for years, sets a ceiling of 2,300 euros on the maximum monthly pension outlay and an upper limit of 3,000 euros for those getting more than one pension.

The plan calls for merging all six main pension funds into one and foresees cuts in future main pensions that could reach up to 30 percent. It sets a lower limit at 384 euros per month.

The plan includes higher social security contributions for employers and employees, by one percentage point for those paid by employers and by 0.5 percentage point for employees.

[…]

The government aims to submit the legislation to parliament by mid-January and have it voted into law by early February, a government official told Reuters, declining to be named.

Official lenders have warned that raising social security contributions may deter job creation and set back economic recovery, meaning negotiations before the final version of the sweeping reform gets to parliament will be tough.

The plan has gotten zero support from the opposition party.

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