Greek pension is generous and meager at the same time

Published on: 18 February 2022

The second-best pension system in the world. That is what we have in the Netherlands, according to the annually published Mercer CFA Institute Global Pension Index, which includes 43 countries. Are other countries doing so poorly? Every two weeks, for twenty weeks, we delve into the system of a specific country. For this episode, we go the Mediterranean again, to the land of olives, the Parthenon and mythology: Greece.


In Greece, pensions are largely funded from the state coffers. During the Greek debt crisis, which broke out in 2010, the government therefore had to reduce pensions several times. As a result, some Greeks had to surrender up to half of their pensions. In 2020, the highest court in the country ruled this to be partially illegal. As a result, the government decided to return a total of 1.4 billion euros to duped pensioners that same year.


The country is now financially back on its feet, but aging is still a major problem there. Greece is one of the most aging countries in Europe; more than 20 percent of Greeks are older than 65. Reforms are therefore needed, but they are not exactly welcomed by the population. New pension plans were received with strikes and demonstrations in 2020. Meanwhile, the legal retirement age has been raised to 67, for men and women who have paid pension contributions for at least 4,500 days (equivalent of 15 working years). Exceptions apply to Greeks who have a heavy occupation or have to work in unhygienic conditions. The same applies to residents who care for children, brothers or sisters with disabilities. Those who would like to retire earlier can stop working from the age of 62. For every month worked less than the 67 years of age, 1/200 will be deducted from the pension. 


No one’s getting rich

The Greek equivalent of our government pension does not depend on income and is therefore the same for everyone (with the aforementioned condition that you have paid contributions for 15 years, but have also lived in Greece for 15 years). This provision is not a bed of roses: 384 euros per month. A considerable contrast with our government pension, which amounts to 1,244 euros for people living alone and 838 euros for people who live together or are married.


Not lavish

The supplementary pension is also regulated by the government in Greece. It is compulsory and, like the Greek government pension, is financed on a pay-as-you-go basis (the working people all pay for the pensions of the pensioners). The maximum amount over which you can accrue pension is 6,500 euros per month. The obligation applies only to employed people. Self-employed people can choose to participate in the supplementary pension plan. Before 2020, the self-employed person’s income determined the pension contribution, but after that they were given the opportunity to choose between six insurance categories each year. The higher the category, the higher the monthly premium payment and the pension ultimately received.  


Sword of Damocles

If you consider that a Greek with an average net income receives no less than 83.6% of that net income as a pension, then you can safely call that generous. Someone who earns half of that average net income in Greece even gets 94.1% of it back as a pension. But don’t be too hasty to conclude that you’re better off in Greece. The average income in Greece is considerably lower than in the Netherlands. Including the government pension, a retired Greek will receive an average of only 17,670 euros per year in 2020. In the Netherlands, that amount is almost 49,000 euros. Moreover, the Greek pension system relies heavily on pay-as-you-go funding. As a result, the ageing of the population hangs over pensions like the sword of Damocles.

The Greek pension system: Facts & figures

Structure: Single-pillar system, with an income-independent government pension and a supplementary scheme that is mandatory for employees (self-employed can choose).


Funding: Pay-as-you-go.









Net pension







Net replacement ratio







Total net pension equity at time of retirement








Explanation of the table:

The column under “1” reflects the situation for someone with the average net income. The column under 0.5 reflects the situation for someone with half the average net income, etc.


Net pension: the net pension someone receives as a percentage of the net average income. 


Net replacement ratio: the net pension that someone is left with, expressed as a percentage of that individual’s total wages.


Total net pension assets: value of expected benefits as a multiple of net annual income.