The Ministry of Labour and Social Security has opened for public consultation a draft law aimed at strengthening Greece’s professional pension insurance system. The bill, spearheaded by Labour Minister Nikē Kerameōs, seeks to modernise and simplify the existing framework—making it more functional, protective, and attractive for both employees and businesses. Stakeholders, including employers, trade unions, professional associations, and citizens, are invited to submit feedback by 27 July.
A Three-Pillar System
Greece’s social security system rests on three pillars:
- Pillar 1: Mandatory state-run insurance, administered primarily through e-EFKA (the unified electronic social insurance fund), supplemented by TEKA (the Supplementary Pension Fund) and direct state support.
- Pillar 2: Occupational pension insurance—including occupational pension funds (TEA) and collective occupational pension insurance contracts—providing supplementary retirement benefits beyond the statutory minimum.
- Pillar 3: Private individual pension insurance, based on voluntary personal pension contracts.
Key Reforms in the Draft Law
The proposed legislation focuses on reinforcing Pillar 2 through three major changes:
1. Introduction of Open Occupational Pension Funds
To broaden access, especially for small and medium-sized enterprises (SMEs) and self-employed professionals, the bill introduces ‘Open Occupational Pension Funds’. These will operate independently of specific employer groups, lowering entry barriers and increasing flexibility.
2. Tax Framework Modernisation
The tax regime for occupational pensions is being reformed to improve incentives. Key measures include:
- New tax benefits for contributions made by both employers and employees;
- Decoupling eligibility from years of insurance and instead linking it to the insured person’s age—making rules simpler and more intuitive;
- Abolishing the current tax penalty for workers who join occupational pension schemes later in life.
3. Full Portability of Pension Rights
The bill ensures full portability—both individual and collective—of accrued pension rights. This means that changing jobs or switching employment status (e.g., from employee to self-employed) will no longer risk loss or erosion of entitlements.
It also introduces group portability, allowing entire pension programmes to be transferred between different types of institutions: from one TEA to another, from a TEA to an OAPE (Occupational Pension Fund for Employees), or between OAPEs. Additionally, individual portability will make it easier for workers to carry their accrued rights across sectors and employment forms.
Broader Benefits
According to Minister Kerameōs, the reforms aim to enhance quality of life by building a more modern and trustworthy supplementary pension system alongside the core e-EFKA pillar. For employees, the changes offer stronger retirement protection; for employers, they provide new tools to attract and retain talent through competitive, tax-advantaged pension offerings; and for the broader economy, they support labour market flexibility and long-term financial resilience.