The operation of the new Auxiliary Capital Insurance Fund began on New Year’s Day and will end gradually after 2025.
The restructured auxiliary insurance system includes new entrants to the labor market from January 1, while from January 1, 2023, all other policyholders under the age of 35 will be able to voluntarily join the Fund.
At the same time, according to the Ministry of Labor, the state guarantees that the supplementary pensions of the “old” system will continue to be calculated on the basis of the existing rules without any reduction.
Individual piggy bank
The central pillar of the new model is the introduction of the “individual piggy bank” for the supplementary pension.
It concerns employees in the public and private sectors, as well as independent engineers and lawyers.
From January 1, 2023, it will be possible to be voluntarily covered by TEKA insurance:
Insured in the Auxiliary Insurance Branch of e-EFKA (ex ETEAEP) who were born from 01/01/1987 and who wish to move from said Branch to TEKA. The specific category of insured can exercise their right to be included in TEKA’s insurance until 31.12.2023.
Employees working in sectors for which there is no obligation to be covered by additional insurance (e.g. self-employed, farmers, liberal health professions) and who retain the right to join TEKA until age 35.
Contributions and benefits
The amount of contributions does not differ from that of the current system, i.e. it is 3.25% for the employer and 3.25% for the employee until May 2022, and at 3 % for each now.
A condition for the entitlement to a monthly supplementary pension is the issuance of a main pension and the completion of 15 years of supplementary insurance.
In cases where the right to a monthly supplementary pension is not established, the contributions paid are refunded in real value to the insured when he reaches the general retirement age, which is not the case today. ‘hui.
In addition, TEKA provides for a minimum supplementary pension in the event of disability or death of an active insured. In particular, if the balance of the individual account of the insured is lower than the amount of the contributions of the insured with 15 years of insurance and a salary equal to the legal minimum wage of a full-time employee, the budget of the State covers the difference and then calculates the insured annuity amount of other eligible people.
TEKA policyholders will be offered a basic pension investment product (default) with a life cycle structure that will combine the appropriate combination of risk, return and insurance for the entire working life of a typical policyholder without having to take more care of the management of its contributions.
The insured will be offered other retirement-investment products, also with a life cycle structure but with a different risk profile, for those who wish to choose the risk rating they wish to take.
The insured will automatically be classified in the default wallet and can choose a different wallet or a combination of wallets via an electronic platform.
If they wish, the insured can change their portfolio every three years.
According to the Ministry of Labor, in the event of negative returns, the state guarantees the payment of a minimum compensatory monthly supplementary pension, which is calculated on the basis of the amount of the real value of contributions paid by the insured.
In other words, the insured is granted a supplementary pension at least equal to that corresponding to the contributions he has paid, taking account of inflation.
The individual insurance piggy bank accumulates the ancillary insurance contributions it pays and then invests in specific investment portfolios. When the time for retirement arrives, the insured’s supplementary pension is calculated on the basis of the cumulative amount of contributions and returns on his individual account.
The insured will be able to access his personal account via a site and an application for mobile phones as well as via other portable electronic devices by 2022.
The website of the new Fund – with all the information necessary for its operation – will operate at the internet address teka.gov.gr. In addition, the myteka.gov.gr application will work, through which policyholders will have access to their individual accounts.