The fiscal effect of the recalculation of main old-age pensions stemming from L. 4387/2016

Published: Jan 19, 2021
Pension recalculations Greek pension reform personal difference in pensions
Georgios Symeonidis
L.4387/2016 introduced the recalculation of existent pensions based on a new type of formula and replacement. The difference between the amounts paid to pensioners at that time and the amounts calculated based on the new law, quoted as personal difference, was later legislated to be either cut, if it was positive, or paid in the long run, if it was negative. This coincided with legislation that froze pension indexation for the years up to 2022. Even though the pension indexation freeze is still valid, the pension reductions initially planned for 2019 were avoided. The pension increases, where applicable, were paid as planned, again in 2019. The extensive workload demanded to make the recalculation and the fiscal gap in contributions in the Greek pension system creates space for possible future application. In this view, this paper focuses on the fiscal effect of the reduction of the personal difference in combination with the freeze in pension indexation.
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