Unexpected bonus in new pensions [αναλυτικός πίνακας και παραδείγματα] 2024-02-23 02:36:34

A profit from 60 euros to 100 euros per month, i.e. from 720 euros to 1,200 euros a year in retirement, will be provided to those insured by the State who belong to the special payrolls, as well as to those insured in the private sector with high pensionable earnings (indicatively, from 1,969 euros to 3,594 euros).

For insured persons with lower pensionable earnings (from 1,230 euros to 1,902 euros), the increase is from 35 euros to 55 euros per month or from 420 euros to 660 euros per year.

Readjustment

The increases are a result of the automatic indexation of wages from 2002 onwards which is taken into account to calculate the compensatory pension.

The salary indexation factors are determined each year based on the change in the previous year’s inflation.

In this case, the indexation of remuneration from 2002 to 2023 will be based on the inflation of 2023, which was 3.5%. This means that the 3.5% change will affect all readjustment rates from 2002 onwards. The pensionable earnings for those due to retire this year will be higher compared to the earnings they would have if they retired in 2023 because they will increase by the rate of last year’s inflation.

With higher pensionable earnings, the compensatory pension will be higher, and they will also be rewarded by the top-up rate increase for the extra insurance time they will have in 2024.

Coefficients

The salary increase factors for those who are going to retire this year have been set by the Ministry of Labor based on the inflation of 2023 and as they were set last year they were increased by 3.5%, so that the salaries of all previous years are brought “up to date”.

For example, last year, the wage change factor for the year 2002 was increased by the inflation of 2022 (9.6%) and was 1.44. The change of 9.6% was passed on to the rates of all years.

This year, the coefficient in 2002 from 1.44, increased by 3.5% (2023 inflation) to 1.49. In the same way, all pensionable salary adjustment factors for the following years (2003-2023) were increased and thus the average pensionable salary will be obtained on the basis of which the compensatory pension will be calculated.

The mechanism

The salary adjustment mechanism for those retiring in 2024 works as follows:

* 2002 salaries are adjusted with the 2002 inflation index, which increased to 1.49.

* 2003 wages are adjusted with the 2003 index, which increased to 1.44.

* 2004 salaries are adjusted with the 2004 index, which was set at 1.40 k.o.c.

In practice, an insured person who has a pensionable salary of 1,900 euros until 2023 and intends to retire in 2024 will get a 3.5% salary increase (indexation) and the compensatory pension will be calculated on a pensionable salary of 1,967 euros.

The increase in salary is due to inflation and a part of it will also go into the pension. For example, if the insured is 39 years old, he will receive a compensatory pension of 933 euros and another 426.17 euros from the national one, i.e. a total pension of 1,359.47 euros.

Without the inflation adjustment he would be left with a pensionable salary of 1,900 euros and would receive compensatory pension of 902 euros, national pension of 426.17 euros and a total of 1,328 euros.

Examples in the public and private sector

1 A university professor who will retire in 2024 with 40 years and a pensionable salary of 3,594 euros, earns 100 euros per month or 1,200 euros per year. The pension for 2024 will be calculated with the pensionable earnings increased by the inflation of 2023, i.e. by 3.5%. If his pensionable salary in 2023 was 3,472 euros, for 2024 it will be 3,594 euros. The pension he will receive in 2024 is 426.17 euros from the national, while the compensatory pension will be calculated at 1,797 euros. In total, he will get 2,223 euros. If he came out in 2023, he would get 2,123 euros (1,736 euros retributive 413.76 euros national, plus a 3% increase).

2 A civil servant who will retire with 40 years in 2024 and pensionable earnings of 1,934 euros will receive a pension of 1,394 euros. The insured himself, if he retired in 2023, would receive a pension (following the 3% increase) of 1,340 euros, because he would retire with 39 years and less pensionable earnings. His profit for 2024 is 54 euros in his monthly pension or 648 euros benefit on an annual basis.

3 An insured person in the private sector who will retire with 40 years in 2024 and pensionable earnings of 2,229 euros will receive a pension of 1,541 euros. The insured himself, if he retired in 2023, would receive a pension (following the 3% increase) of 1,479 euros, because he would retire with 39 years and less pensionable earnings. His profit for 2024 is 62 euros in his monthly pension or 744 euros benefit on an annual basis.

The amounts they earn

Special payroll employees, public and private sector
Pensionable salary 2023 (1)	Pensionable salary 2024 (2)	Pension in 2023 with 37 years and 3% increase	Pension in 2024 with 38 years	Profit for 2024	Pension in 2023 with 39 years and 3% increase	Pension in 2024 with 40 years	Profit for 2024
3.472	3.594	1.941	2.040	99	2.123	2.223	100
3.137	3.247	1.795	1.884	89	1.960	2.050	90
2.829	2.928	1.660	1.741	81	1.809	1.890	81
2.565	2.655	1.545	1.618	73	1.680	1.754	74
2.473	2.560	1.505	1.576	71	1.635	1.706	71
2.293	2.373	1.427	1.492	65	1.547	1.613	66
2.154	2.229	1.366	1.427	61	1.479	1.541	62
2.070	2.142	1.329	1.388	59	1.438	1.498	60
1.902	1.969	1.256	1.310	54	1.356	1.411	55
1.869	1.934	1.242	1.295	53	1.340	1.394	54
1.719	1.779	1.176	1.225	49	1.266	1.316	49
1.665	1.723	1.153	1.200	47	1.240	1.288	48
1.577	1.632	1.114	1.159	45	1.197	1.242	45
1.486	1.538	1.075	1.117	42	1.153	1.195	43
1.561	1.616	1.107	1.152	45	1.189	1.234	45
1.416	1.466	1.044	1.084	40	1.118	1.159	41
1.347	1.394	1.014	1.052	38	1.085	1.123	39
1.290	1.335	989	1.026	37	1.057	1.094	37
1.230	1.273	963	998	35	1027	1.063	35

(1) Indexation with inflation of 9.6% year 2022.

(2) Indexation with 3.5% year 2023 inflation.

Gross pension amounts.

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