DC Pension Schemes in Greece offer a structured and beneficial way for employers and employees to save towards retirement, with significant tax advantages and investment opportunities.
Background on Greece’s Social Security Pensions
Public pensions in Greece are designed to provide income to Greek pensioners upon reaching retirement. The current retirement age is 67 for both men and women, with only marginal reductions possible. Each employee belongs to a main social security fund for various benefits including pensions, disability, and medical benefits. Some employees may also participate in occupational insurance funds, depending on their professional sector.
Due to Greece’s fiscal meltdown years (2010-2016), the social security system underwent significant revisions, resulting in fund mergers (currently, EFKA is the main one), reduced pensions, increased retirement ages, and higher contributions for farmers and self-employed individuals.
Private Deposit Administration Funds (Pension Plans)
Private group pension plans in Greece are offered on a voluntary basis and can only be provided as Defined Contribution (DC) plans. These plans are based on fixed periodical contributions from the employer, with employees also able to participate on a mandatory or voluntary basis. Lump-sum contributions are permitted and are commonly used towards annual bonuses. Contributions paid by the employer are fully tax-deductible, while contributions paid by the employee are deducted from the employee’s taxable income.
Market Practice
Group Pension Plans are quickly becoming standard market practice due to full corporate tax deductibility of contributions, competitive tax rates at cash out, and excellent return on investment. Classic Pension DC Plans have small or no risk but lower returns, while Unit-Linked Products have higher investment risk but greater potential returns.
Tax Benefits
The tax benefits of Defined Contribution Pension Plans in Greece are significant:
DC Pension Schemes in Greece offer a structured and beneficial way for employers and employees to save towards retirement, with significant tax advantages and investment opportunities.
Reach out to our team v.deliniotis@comergon.gr and l.kalogerakou@comergon.gr to learn more about DC schemes in Greece and how we can support you during the implementation and administration of the plan.
Louisa Kalogerakou
Director
Employee Benefits Team
Comergon SA
T +306 974 324 430
