Major pension, labour reforms

 A landmark draft bill implementing major reforms in Greece's creaky social security system and its domestic labour market was unveiled on Friday by the relevant minister, legislation that also envisions the possibility of more changes every two years on the basis on actuarial studies.

Amongst the major changes cited in the draft bill are increases in retirement ages, with the age of 65 serving as the general retirement age -- 60 years will be the retirement limit on the condition of 40 years of verified work. The change will abolish the 35-year and 37-year limits currently in force in Greece's social security system.

Exceptions to this regime will be individuals insured before 1983 in various funds affiliated with state-run utilities and enterprises, banks and the press/media fund, where the 35-year limit will remain, or, 37 years of work for retirement at age 58.

Just as importantly, the method of calculating monthly social security pension rates will be changed, with the basic monthly rate set at 360 euros (in current rates). The amount added on to the basic pension rate will be calculated on the 64-percent figure of total contributions paid. (ANA-MPA)

 Furthermore, the so-called "13th" and "14th" salaries will be eliminated in both the public and private sectors, meeting one of the major commitments agreed to by the government with the "troika" -- comprised of the Commission, European Central Bank (ECB) and International Monetary Fund (IMF) -- in a memorandum that preceded approval of Greece's 110-billion-euro "support mechanism".

 Nevertheless, Labour & Social Insurances Minister Andreas Loverdos clarified that bonuses -- 400 euros ahead of the Christmas holiday; 200 euros before Easter and 200 euros for the summer holidays -- will be considered by the state as "preferred subsidisation" in place of the extra two months of pay.

The draft bill, conversely, does not abolish pensions to widows or eligible widowers or the abolition of small pensions to eligible unmarried daughters of deceased beneficiaries. (ANA-MPA)

 As per provisions for early retirement by women in the wider public sector with at least one minor -- a benefit that garnered extensive scrutiny by eurozone and IMF inspectors -- the change foreseen in the bill includes raising retirement ages for eligible (ANA-MPA) women every year, beginning in 2011. Specifically, at age 52 as of Jan. 1, 2011; age 55 on 2012 and reaching the general limit of 65 as of Jan. 1, 2013. The same aforementioned eligible women will retain the right to a reduced retirement pension if they leave work at ages 50, 53 and 60, respectively.

Finally, individuals hired by the public sector as of Jan. 1, 2011 will be insured with the IKA fund, Greece's largest social security and health fund.

The landmark draft bill was tabled in Parliament on Friday after the end of an inner cabinet meeting and will reportedly open for debate on Tuesday, with a vote by the Parliament plenum a week later.