The key finding is that public pensions, on their own, will likely be unable to ensure adequate replacement rates for workers in the future, noted the Governor of the Bank of Greece while speaking at the 7th Occupational Insurance Conference titled “Occupational Insurance at the Heart of the European Strategy for Savings and Investments.”
The speech in full:
Ladies and gentlemen,
It is with great pleasure that I welcome you to the 7th Occupational Insurance Conference, an event that has now established itself as a benchmark for public dialogue on the future of pension protection and the role of occupational insurance in the economy and society.
In recent years, occupational pension funds have been at the center of significant developments at both the European and national levels. These developments are directly linked to demographic aging and the growing pressure on public pension systems, as well as with the European Union’s strategic choice to strengthen long-term savings and channel more private capital toward investments and European capital markets.
Europe is moving toward a three-pillar model of pension provision: public pensions, occupational pensions, and private savings. Within this framework, the second pillar—occupational pension funds—is playing an increasingly central role.
The key finding is that public pensions, on their own, will likely struggle to ensure adequate replacement rates for workers in the future. For this reason, the European Union is seeking to strengthen occupational pension schemes so that they function as a supplement to the public system by encouraging long-term savings.
At the European level, the discussion centers on the revision of the IORP II Directive and the broader “Savings and Investments Union” strategy. The European Commission aims to increase workers’ participation in occupational pension schemes, strengthen European capital markets by leveraging the reserves of occupational pension funds, and achieve greater harmonization among member states in terms of both operational practices and supervisory approaches.
At the national level, Greece is now more actively following this European direction. With Law 5078/2023, the operational framework for Occupational Insurance Funds was brought more into line with European standards for supervision and governance. Transparency requirements and investment policy rules have been strengthened, and supervision by the Bank of Greece is carried out with a particular emphasis on protecting policyholders.
However, despite this positive momentum, the Greek market continues to face significant challenges. Employee participation remains limited, while the insurance and investment culture in our country has not yet developed to the extent required. At the same time, the small size of many funds makes it difficult to achieve economies of scale and increases operating costs. For this reason, a coordinated effort is needed from all stakeholders, with the aim of strengthening the confidence of employers and insured individuals in the system.
With just 27 Occupational Insurance Funds and approximately 55,000 members by the end of 2025, it is clear that the system is still in an early stage of development, despite the significant prospects and momentum demonstrated by the Occupational Insurance Pillar.
Although both assets and technical provisions recorded increases of over 20% compared to 2024, the overall figures remain modest, as assets stood at 621 million euros and technical provisions at approximately 550 million euros for 2025.
It is a fact that the effort to reform the pension system has historically been a complex challenge, as it is influenced by demographic aging and growing socioeconomic demands.
Rising life expectancy and declining birth rates place a burden on the pay-as-you-go system, shifting the cost to younger generations and raising issues of sustainability and intergenerational equity. At the same time, rising expectations for a decent standard of living after retirement highlight the limited capacity of the First Pillar to meet future needs on its own.
In this context, the funded Second Pillar can serve as a complement, strengthening the link between contributions and benefits, enhancing transparency, and offering the prospect of higher returns. However, its success requires a robust supervisory framework, institutional safeguards, and meaningful information for insured individuals, in order to strengthen the trust, sustainability, and social cohesion of the pension system.
As we begin the conference, I would like to focus on the big picture:
Occupational pension funds are not a peripheral institution in the insurance market. They are gradually evolving into a key pillar of the European pension and investment system, so that in the coming years they will contribute both to providing workers with supplementary pension protection and to financing the real economy and European investments. Pension funds are expected to play a much greater role in the coming years, both as a pension institution and as an investment pillar, both domestically and at the European level.
In conclusion, I would like to emphasize that the Bank of Greece, in addition to ensuring the financial supervision of the Occupational Insurance Funds and their compliance with transparency requirements toward their members, will continue, as part of its supervisory role, to support any initiative that contributes to improving and further strengthening the Second Pillar of Social Security.
I sincerely wish your conference every success!