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The main pension increases that will be felt in the pockets of more than 500,000 old and new retirees will be brought with the full application of Law 4670/2020 next March.
The raises will be awarded to those who have left with 30 years of insurance or more and will be seen in the pockets of retirees who have little or no positive personal difference.
The process already started by him ΕΦΚΑ assumes a new recalculation of all pensions issued with an insurance period of more than 30 years, so that through this recalculation the new amounts of the compensatory pension are determined according to the new replacement rates introduced by law 4670/2020 (Vroutsi law) by decision of the Council of State.
The law is retroactively effective from 10/1/2019 and therefore the increases will be retroactively 16 or 17 months.
The new calculation divides retirees into two categories:
- To the elderly, who retired before the Katrougalos law, that is, until 12/5/2016.
- To the youngest, who retired with the provisions of the Katrougalos law, that is, from 5/13/2016 to 9/30/2019.
In both categories, pensions with an insurance period of more than 30 years will be increased and, in fact, for salaries exceeding 2,000 euros at 40 years, the increases will exceed 150 euros per month.
However, old retirees (until 12/5/2016) will have an increase in their pocket if the personal difference is exceeded with the increase in pension, and new retirees (after 5/13/2016) will receive the increase if had discounts of up to 20% of the Katrougalos law, while those who had a discount of more than 20% will receive a new favorable personal difference.
Raises for retirees will be given in five annual installments and for youth in one installment.
There is a third category, that of retirees who will leave with the provisions of law 4670/2020, that is, with a request as of 10/1/2019. These are the youngest retirees, who will not have a recalculation, but a direct calculation of their pensions with the new, increased replacement rates if they leave with more than 30 years of insurance.
The increases that will occur for retirees with the recalculation of pensions will be paid from March 2021, and in April, unexpectedly, the retrospectives of the increases will be given, which will be for 16 or 17 months. Given that the law is valid from 10/1/2019, if the pension is taken from the services as the basis for calculating the increase in October 2019 (paid from September 2019), then the retroactive increase until March is 17 months. If the pension paid in October (i.e. the November 2019 pension) is taken as the starting point for increases, by March 2021 they are retroactively 16 months.
The issue of retrospectives will be resolved with the new circular drawn up by the Ministry of Labor and Social Affairs, in which, as revealed by “ET”. On Sunday, a special arrangement will be included to establish a personal difference to those who receive two national pensions that were not granted under law 4387, but … according to the interpretation of the law with circulars of 2018.
The secrets of increases at the new replacement rates
The new rates are increased compared to law 4387 (Katrougalos law) from 30 to 44 years of insurance and grant higher pensions to new and old retirees. From the age of 45, the new percentages are lower than those derived from law 4387, but the impact of the lower percentages will not entail any reduction in the old pensions, on the one hand because in the recalculation those over 45 will retain the same pension. although the new percentages make it lower, and on the other hand because the “new retirees”, with a request as of 10/1/2019, can choose to leave the area between 35 and 40 years taking the “steak” of increases. If they need to extend their retirement after age 40, they will still have a gain of up to 44 years of insurance, while in very few cases they will retire with a term of more than 45 years, because the vast majority will retire from 2022 to 62 years. years with 40 years of insurance.
Pension information with increments up to 173 euros and retroactively 3,000 euros
The increases for retirees will be reflected in the pension information that will be printed starting in March.
They will have changes in the amounts of the compensatory pension and in the reserves and in the personal difference.
The increases will be proportional to salaries, years of insurance and personal difference.
Those who have a small personal difference (50, 100 euros) can set it to zero and leave an increase for their pocket.
Those who have a large personal difference, the increase they will receive will go to the pension and reduce the personal difference equally.
Those with no personal difference will get the full increase.
For example:
- A pensioner (from Table 2) who retired in 2017 at 38 years and three months and a pensionable salary from 2002 to 2017 of 1,380 euros, received a pension of 928 euros under the Katrougalos law. With the recalculation of the Vroutsis law, the pension increases by 84 euros per month and from March 2021 it will be set at 1,013 euros, while in April you will receive 1,428 euros retroactively.
- A pensioner (from table 2) who left in 2018 at the age of 40 and with a pensionable salary of 2,397 euros, received a pension of 1,410 euros under the Katrougalos law. With the recalculation of the Vroutsis law, the pension increases by 173 euros per month and from March 2021 it will be set at 1,583 euros, while in April you will receive 2,941 euros retroactively.
- An elderly retired (from table 3) who left with 41.6 years of insurance has, since the recalculation of law 4387, a pension of 1,590 euros, of which 34 euros are a personal difference. With the new recalculation, he obtains an increase of 135 euros, sets the personal difference to zero and the pension is set at 1,725 euros. The increase will be given in five installments of 27 euros per year. In March 2021 the pensioner will take with him the increase of 2020 and 2021, that is, 54 euros with 17 months retrospectively of the 2020 increase, that is, 459 euros (27 × 17 = 459).
- An elderly pensioner (from table 3) who left with 36.5 years of insurance has, since the recalculation of law 4387, a pension of 1,444 euros, of which 172 euros are a personal difference. With the new recalculation you get an increase of 78 euros and reduce the personal difference to 94 euros.
TABLE 1: FINAL REPLACEMENT RATES FROM 30.1 TO 44.9 YEARS OF INSURANCE
TABLE 2: INCREASES IN PENSIONS WITH THE NEW LAW ON PENSIONERS AS OF 5/13/2016
- New pension with recalculation of law 4670/2020.
- Old pension with retirement decision of law 4387/2016
- Gross pension amounts.
TABLE 3: INCREASES IN PENSIONS FOR FORMER PENSIONERS (UNTIL 12/5/2016)
- Pension amounts after deductions and before taxes.
From the printed version from the Free Press on Sunday
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