Greece tables occupational pension bill: open funds, lower exit-age taxes and full portability

A bill to broaden the second pillar

Greece's Ministry of Labour and Social Insurance submitted a bill on 28 July that overhauls occupational pension provision. The draft law, titled “Strengthening occupational insurance: more possibilities for workers and businesses, expanding choices for supplementary retirement saving”, is the most comprehensive update of the second pillar in years. It was filed after a 15-day public consultation that drew 130 comments, and parliamentary scrutiny is set to start immediately. The labour minister, Niki Kerameos, framed the measure as a way to make supplementary retirement protection simpler, more functional and more attractive for both employees and employers.

The strengthening of occupational insurance is an important reform that broadens the options for workers and businesses. With the bill we tabled in parliament we are creating a more modern, more functional and more reliable framework for supplementary retirement protection. We are giving workers more possibilities to strengthen their retirement prospects, while at the same time we are giving businesses a stronger tool for attracting and retaining human resources. It is a reform with benefits for the insured, for businesses and for the Greek economy as a whole.

Open funds open the door for small firms and freelancers

The centrepiece of the reform is the creation of open Occupational Insurance Funds (TEA) and open Group Insurance Products for Occupational Retirement (OAPES). Until now, only large corporate groups or sectoral organisations could afford the administrative and organisational burden of setting up a stand-alone fund. Under the new model, a small or medium-sized enterprise does not establish its own fund but simply signs an agreement with a licensed open TEA, which then manages contributions, investment policy, member information and compliance under the supervision of the Bank of Greece. The right to participate is not restricted by employee headcount.

The aim is to bring within reach the roughly 10,500 hotel businesses and 150,000 hotel employees who have already shown strong interest. Their sectoral fund, part of the 2025 collective agreement signed by the social partners, is in the final licensing stage and, if launched, would be the country’s largest occupational fund.

A new tax regime tied to exit age

The bill inserts a separate tax treatment for voluntary occupational pensions. Instead of taxing benefits according to the number of years a member contributed, the rate will depend on the age at which the saver starts to draw the benefit. For those who begin receiving benefits between the ages of 62 and 67, the tax is 5% on periodic payments and 10% on lump sums. After the 67th birthday the rates halve: 2.5% for periodic and 5% for lump sums.

In a practical example from the supporting documents, a 64-year-old withdrawing a lump sum of €20,000 pays €2,000 in tax, netting €18,000. The same saver choosing a monthly pension of €500 pays €25 each month, receiving €475 net. However, anyone who cashes out before age 62 without having already retired from the main social insurance system is taxed on the full amount under the ordinary income tax scale, not the low flat rates.

Contributions are made more generous, too. Employer and employee contributions to occupational plans become 100% tax-deductible. The annual ceiling rises sharply: €35,000 for the self-employed and 35% of annual income for salaried workers. This replaces a lower, more restrictive cap and removes the previous penalty for workers who joined a fund at an older age.

Full portability and uniform supervision

All accrued rights become fully portable. An insured person who changes employer or sector does not lose benefits, a safeguard designed to support labour mobility. The entire occupational system (both TEA and OAPES) will be regulated under a single framework by the Bank of Greece, with equal obligations and incentives for all providers.

Tight summer timetable

Parliament will discuss the bill under a compressed schedule because of the August recess. The Committee on Social Affairs begins its examination on Thursday 30 July, with hearings of selected stakeholders starting the next day, 31 July. The government wants the law adopted by 27 August, immediately after the house reconvenes. If that deadline holds, the first effects of the reform (particularly new fund registrations) should become visible from September 2026.