Policy makers involved within the social security and benefits context in Greece are faced with major new challenges since the beginning of 2002. For a number of years, discussions on the reform of the domestic social protection system was a hot issue on the political agenda, leading to strong reactions by trade unions and pensioners’ associations. The socialist government decided to adopt important amendments to the first and second pillar schemes, with the view to address funding problems and to restore the visibility of pension and health care funds.
An action plan with guiding principles and recommendations was submitted for consideration by the Ministry of Labour and Social Insurance to the social partners. It includes proposals for legislative modifications as well as for the introduction of new organisational or funding structures, focusing on the establishment of a single national social insurance scheme for private employees.
Governmental recommendations are also related to the development of the second pillar schemes. The reform of second pillar will be a long-standing process with major implications for administrators, insured persons and providers of insurance services in the domestic private market. This is due to the peculiarities of the Greek system, which does not follow traditional second pillar techniques advanced in other EU countries: there are not pure supplementary pension funds established by employers. Instead there are public compulsory supplementary pension schemes for different socio-professional groups as well as few voluntary schemes that set up by employers and employees and very few private oriented schemes, which generally take the form of collective insurance contracts taken out by private firms, on behalf of their employees, with life assurance companies.
Social partners are not entitled to establish second pillar funds, given that the existing legal framework (in force since 1955) prohibits the participation of employers in the design of occupational benefits schemes. Supplementary benefits are therefore provided by public funds or mutual aid societies, which do not correspond to the dominant European approach on second pillar protection.
The main objective of the governmental plans in the second pillar field is to update occupational pension legislation for private companies and to introduce a framework for regulation of the existing public or semi-public supplementary funds. The main players have started to elaborate scenarios on the development of private oriented supplementary schemes. Trade unions promote the establishment of second pillar funds by collective initiatives; these institutions will provide benefits according to the funding system and their function should be subject to strict controls by the state, given that insured persons will be compulsorily covered. On the other hand, insurance companies and groups promote the liberalisation of the market, aiming at strengthening competition procedures between compulsory and personal benefits.
Gabriel Amitsis is director of the Athens-based consultancy Institute of Social Innovation, the Greek member of International Benefits Network (IBN)