The Greek Ministry of Labour and Social Security has submitted a bill to parliament aimed at modernising the country’s occupational pensions framework.

The draft law, entitled Strengthening occupational insurance: more opportunities for workers and businesses, expanding the options for supplementary pension savings, aims to strengthen the protection of insured persons and expand the options available in the existing occupational insurance framework.

This is intended to create a simpler, more functional and protective occupational pension system for employees and businesses.

The framework would operate under the supervision of the Bank of Greece, with the same requirements and incentives for all occupational insurance providers, including occupational pension funds and insurance companies.

The bill also introduces three key changes – the introduction of Open Occupational Pension Funds and Open Group Occupational Retirement Insurance Products (OAPES), the creation of a modern, enhanced tax incentive framework, and the protection of insured persons' full portability of their rights.

The introduction of OAPES aims to facilitate access to occupational pension schemes for small businesses and self-employed professionals, addressing a longstanding gap in the Greek pension system.

As the Greek economy is dominated by small enterprises with relatively few employees, access to supplementary second-pillar pension insurance has until now been “virtually impossible”.

The second change, the creation of a modern tax incentive framework, is intended to make occupational insurance significantly more attractive for employees and businesses and align with best international practices.

Contributions to these pension plans are now fully tax-deductible and under the new bill the maximum contribution limits will increase significantly. Self-employed individuals will be able to contribute up to €35,000 per year, while employees can contribute up to 35 per cent of their annual income.

The new draft law will also mean the taxation of pension benefits is no longer based on years of insurance but instead linked to retirement age. In addition, the tax penalty for employees who join occupational pension schemes at an older age will be removed.

The final change introduced by the bill will mean that a job change or change to employment status will not result in the loss or erosion of an insured person's established rights.

In particular, the bill will allow pension plans to be transferred between different types of occupational pension institutions, such as Occupational Insurance Funds (TEAs) and OAPES, and enable personal mobility, making it easier for employees who change jobs to move their accumulated pension rights to a new occupational pension provider.

The Bank of Greece will oversee this to ensure policyholders remain protected.

With its submission to the parliament, the draft law now enters parliamentary processing, with the debate in the competent Committee on Social Affairs starting today (30 July).

Commenting on the bill, Greece’s Minister of Labour and Social Security, Niki Kerameus, said: “The strengthening of occupational insurance is an important reform that expands the options of employees and businesses.

“With the bill we submitted to the Parliament, we are creating a more modern, more functional and more reliable framework for supplementary pension protection.

“We give employees more opportunities to enhance their retirement prospects, while at the same time providing businesses with a stronger tool to attract and retain human resources. This is a reform with benefits for the insured, businesses and the Greek economy as a whole."

Occupational insurance is the second pillar of the insurance system, which works in addition to compulsory public social security, providing employees and businesses with additional pension protection opportunities with supplementary pension benefits.

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