Demographic problem precipitates social security changes

The reform of the insurance system, and the pillar of the main pensions, is constantly put on the table of public debate and reflection under the weight of the dramatic deterioration of the country’s demographic problem.

The issue of timely changes in the insurance system was raised – indirectly but clearly – during the online event organized by the Competitiveness Council (COMPETE GREECE) on “Demographics, Insurance Reform and Investment”.

Characteristic is the finding of the day that the “age pyramid in the country has been completely reversed”, with the workers in Greece being “fewer and older”.

In fact, at the conclusions of the event, special reference was made to the interconnection of the demographic problem with social security insurance and pension, as well as to the dramatic change of the environment.

“Changes are needed to address the ills,” it was said, with the admonition that “otherwise we will remain citizens of a fossil forest.”

The event was attended by the Deputy Minister of Social Affairs Mr. P. Tsakloglou who presented the demographic data of population decline, with births falling to 1.37, and at the same time significantly increasing the life expectancy to 78 years.

“In other words, we have a complete reversal of the age pyramid,” he said, stressing that “auxiliary insurance reform has a long-term horizon, a foresighted nature and addresses the demographic risk.”

Analyzing the risks of the Greek social security system, Mr. Tsakloglou pointed out that “the existing system is almost entirely distributive, and the distribution systems are exposed to demographic risk.”

In the new system, he noted, the pension of each retiree will consist of three parts:

The national pension is paid from the budget and is subject to “fiscal risk”.

The compensatory pension paid by employees’ contributions and subject to “demographic risk”. And the supplementary pension paid from the pensioner’s own contributions and returns on his investments and is subject to “purchase risk”. “Consequently”, stressed Mr. Tsakloglou, “with the reform of the supplementary pension, the exposure to the demographic risk is reduced, the differentiation of the insurance risk is achieved and the total risk is reduced”.

The president and scientific director of The Centre of Planning and Economic Research (KEPE), Mr. P. Liargovas, went one step further, emphasizing that “the key word is reform”.

“The first step was taken for retirement. “But reform is needed in other areas as well, so that solutions can be found.”

The discussion was attended by: Simos Anastasopoulos, President of the Competitiveness Council of Greece, Panos Tsakloglou, Deputy Minister of Social Affairs, Panagiotis Liargovas, Chairman of the Board and Scientific Director of KEPE, Christos Ioannou, Director of Employment and Unemployment University of Piraeus, Dr. Marili Mexi, International Labor Organization (ILO), Lambros Gogos, Partner EY and Dr. Venetia Kousia, General Manager of the Competitiveness Council of Greece.