The May report from the “Helios” system highlights the reduction in new private-sector pensions and severe financial pressures facing the majority of pensioners in our country.
New private-sector pensions are 45.7% lower—or €644 less—than new public-sector pensions, which averaged €1,400, compared to €763 in the private sector.
For all pensions, old and new, the average expenditure for a primary pension was just 866 euros, for a supplementary pension 196 euros, while the average pension benefit did not exceed 116 euros.
The data indicate that the gap between old and new pensions is widening, as is the gap between private- and public-sector pensions administered by EFKA, with the data indicating that the biggest losers are new retirees, particularly those from the private sector.
They are the ones who have suffered the most from the consequences of the prolonged economic crisis, the deregulation of the labor market, and the new method of calculating pensions.
Specifically, the data show that the average new pension awarded in May to insured individuals from the private sector amounted to just 763 euros. In contrast, the average pension granted to public sector retirees reached €1,407.23.
The difference of 644 euros translates to a 45.78% disparity, a percentage that remains exceptionally high and confirms a trend that has been consistently recorded in recent years. The most concerning aspect is that the overwhelming majority of new pensions are for private-sector insured individuals, whose pensionable earnings are very close to the thresholds of economic vulnerability.
A Decade of Austerity
In total, last May, the EFKA awarded 18,833 new pensions to employees, self-employed professionals, and farmers in the private sector, compared to just 1,643 public sector pensions, with wage trends during the decade of the memoranda playing a decisive role in the final pension amount.
The reduction in earnings, the widespread use of flexible forms of employment, periods of unemployment, undeclared work, and the weakening of collective bargaining agreements had a direct impact on the pensionable earnings of hundreds of thousands of insured individuals.
At the same time, for the self-employed and farmers, the choice of lower insurance categories, due to limited incomes, led to correspondingly lower pension benefits.
The method of calculation
The method of calculating new pensions also plays a decisive role, as ENYPEK points out. Unlike older systems, where greater weight was given to earnings from the final years of employment, today the contributory pension is calculated based on the average earnings over the entire insurance period. This means that low wages during the crisis, gaps in insurance coverage, and years of reduced earnings follow the insured person until retirement.
The result is the gradual emergence of two distinct “generations” of retirees. On one hand are older retirees, who accrued benefits during periods of higher wages and more favorable calculation rules. On the other hand, new retirees, mainly from the private sector, are entering the system with significantly lower benefits.
The average primary pension stood at €865.99 gross in May, while approximately 1.13 million retirees receive a primary pension of up to €1,000. Of these, nearly 265,000 live on a pension that does not exceed €500.