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OECD: Greece still has work to do on pensions reform

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  • OECD: Greece still has work to do on pensions reform

GREECE - Pension reforms introduced in 2010 will help Greece save as much as €200m this year, but the country still needs to restructure supplementary pension funds and limit early retirement, the OECD has said.

In a new report on Greece, the OECD welcomed the recent reforms implemented by the government last year, which aim to tighten the conditions for early retirement. But the organisation warned that additional measures would need to be introduced. 

"It is important to proceed with the reform of supplementary pension funds and to strictly limit the list of strenuous occupations in order to reduce the number of people eligible for early retirement under preferential conditions," it said.

The OECD's report recommended the introduction of a reform introducing a move toward actuarial neutrality and increasing by two years the effective retirement age, which it said would boost the employment rate by 2.5% over the next 10 years.

According to the OECD, the government also needs to remove incentives for early retirement and change the conditions for awarding minimum pensions so that access is limited to persons who have reached the legal retirement age.

Another recommendation includes the raising of the minimum age for drawing a full pension after 37 years' contributions to above 58.

The OECD went on to say: "The far-reaching reforms that the authorities have made in the pensions sector are of special importance. However, the pension reform adopted in 2008 did not help to reduce early retirement age.

"Financial penalties for early retirement before the legal age of 65 were not sufficiently dissuasive. Over the five-year period 2004-09, the average effective retirement age was at 62 and 59.5 for men and women, compared with 63.5 and 63 in the OECD average."

The OECD did welcome the reform implemented in 2010 that reduces the conditions for early retirement and simplifies the pension system, with only six remaining pension funds against 133 before the 2008 reform.

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