Reforming the Greek Pension System

By Alvar Kangur, Niki Kalavrezou, Daehaeng Kim

July 16, 2021

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Alvar Kangur, Niki Kalavrezou, and Daehaeng Kim. Reforming the Greek Pension System, (USA: International Monetary Fund, 2021) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The Greek pension system has been costly, complex, and distortive, which has contributed to Greece’s fiscal problems and discouraged labor force participation. Several attempts to reform the system faltered due to lack of implementation, pushback by vested interests, and court rulings leading to reversals. A series of reforms introduced throughout 2015–17 unified benefit and contribution rules, removed several distortions and reduced fragmentation and costs. If fully implemented throughout the long-term, these reforms can go a long way towards enhancing the pension system affordability. However, reforms faced setbacks and fell short of creating stronger incentives to build long contribution histories, to deliver sustainable growth by improving the fiscal policy mix, and to ensure fairness and equitable burden sharing across generations and interest groups. Policy priorities should aim towards fully implementing the 2015–17 reforms and complementing them with additional reforms to address these remaining objectives.

Subject: Aging, Expenditure, Labor, Pension spending, Pensions, Population and demographics, Retirement, Wages

Keywords: Aging, Europe, Fiscal consolidation., Labor market incentives, Pension reform, Pension spending, Pension system, Pension system affordability, Pensions, Policy priority, Policy recommendation, Reform objective, Retirement, Wages

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/188
Stock No:

WPIEA2021188
ISBN:

9781513588841
ISSN:

1018-5941

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