We witness the same story over and over again. Contributions rise, while replacement rates of future generations fall, in order to allegedly ensure pensions, and cover fiscal holes.
To Potami has been studying, making decisions and proposing. It has no hidden agenda; it does not serve populism. This is why To Potami issues its own proposal on the social insurance system. The proposal of three pillars. It goes against the flow, against slogans, against the old system of political parties that remain attached to the past of clientelism. Against the system that the current government of SYRIZANEL is serving.
We see the dead-end and we cannot remain inactive. We have a specific proposal to make. We call our proposal the “system of three pillars”.
Three types of pension:
- Main pension – This is provided by the state.
- Professional pension (second pillar, instead of the subsidiary) – It is provided by professional insurance funds, which can be established by professional sectors (engineers, farmers, journalists, lawyers, doctors). They are endowed by the assets and liability of subsidiary pensions and one-off allowances.
- The third pillar; the optional complementary pension. Personal savings, upon taxation incentives and others. It is provided by insurance companies, which have the right to cooperate with professional funds.
This “three pillar pension system” suggested by to Potami ensures:
- Direct link of contribution with the main pension
- Protection of future generations from the arbitrariness of former generations.
Besides, we witness the same story over and over again. Contributions rise, while replacement rates of future generations fall, in order to allegedly ensure pensions, and cover fiscal holes.
There must be flexibility in the level of contributions, especially when it comes to the self-employed and freelancers.
- The beneficiary is to decide what is more important for him; low contributions with a high pension or higher contribution with an even higher pension.
Besides, there is a reasonable question rising; Who will pay higher contributions, amidst this crisis? While it is likely that the beneficiary will get a low pension, if any. This is, in fact, an incentive for evasion of social insurance contributions.
You ask Greeks to “pay now”, claiming that they will “get their money back tomorrow”. The first one is sure, while the second one is hypothetical. Well, I wouldn’t hold my breath.
The proposal made by to Potami, on a new social insurance system, puts an end to hypocrisy. It eliminates the uncertain promises of the State, protecting the vulnerable ones that are majorly hit by the breach of the government’s promises.
This is the system currently implemented by most countries in Europe, from Denmark and Sweden to Italy and Poland. A similar system had been proposed by the Budget Department of the Hellenic Parliament and the Committee of Wise Men, established by the government of SYRIZA itself, which is now disregarded by Minister of Labour, Mr Katrougalos.
When it comes to main pensions, everyone will pay half of what they currently pay. The rest of the money will be channeled to new professional funds and invested in real economy.
However, the professional insurance will also be mandatory, but with a certain limit; i.e. a 3% contribution. Any additional contribution will be optional. Yet, sectors and beneficiaries will be able to pay more and get more, in case that the funds’ investments deliver.
The amount of money will be his own money. But, the fall of contributions will revive the economy.
What about the existing pension system? How will we be able to finance it? The gap is acknowledged and the way it will be covered may be programmed, upon the conclusion of a national agreement.
The recovery of the economy will generate a “development dividend” for everyone, especially for pensioners.
Yet, the words development, production and, mostly, plan are words you are not familiar with. You are only interested in hollow slogans. The food of populism.
Photo credit: Theodore Manolopoulos
