The draft law entitled “Improving the framework of occupational insurance: More opportunities for employees and businesses” was presented today, Tuesday, by the Minister of Labour and Social Security, Niki Kerameos, at a press conference she gave jointly with the Deputy Minister of Labour, Anna Efthymiou, and the Secretary General for Social Security, Konstantinos Tsangkaropoulos.
The subject of the bill is the improvement of the existing framework of occupational insurance, so that it becomes simpler, more functional, more protective and more attractive for employees and businesses.
“We are creating a more modern and reliable supplementary insurance framework in addition to the first insurance pillar, e-EFKA. We support employees by giving them the possibility of additional pension protection. We support businesses by giving them the possibility of additional benefits and incentives.
We strengthen the national economy by boosting household savings and creating new jobs in the financial sector. We are building today for better protection and a better pension outlook in the coming years,” the minister stated.
The insurance system consists of three pillars. The first concerns compulsory insurance and constitutes the main and strong pillar of the system, with the main institution being e-EFKA, as well as TEKA. The second includes occupational insurance (Occupational Insurance Funds and group occupational pension insurance contracts), which offer additional pension benefits. The third pillar concerns private insurance through individual insurance contracts.
The main objective of the proposed draft law is to strengthen the second pillar through the creation of a modern and competitive framework for supplementary pension savings, which will allow greater flexibility, strengthen the protection of the institution and make occupational insurance more attractive.
The three axes of the bill
The draft law moves along three axes:
First axis: Flexibility and simplification of the operation of Occupational Insurance Funds (TEA)
The bill provides for the introduction of Open Occupational Insurance Funds, in order to facilitate access for smaller businesses and self-employed professionals. The Open TEA will receive an operating license from the Bank of Greece and will be able to accept new businesses, collective bodies and trade union organizations simply and quickly without prior supervisory approval. The goal is for TEA to operate faster, more clearly and more effectively without reducing supervision and the protection of employees.
Second axis: More attractive occupational insurance for employees and businesses
The bill provides for the rationalization of the tax framework through the improvement of tax incentives, decoupling from years of insurance and linking to the age of the insured. At the same time, the tax penalty is abolished for those employees who decide to enter occupational insurance at an older age, while the possibility of providing health programs by TEA is given. In addition, a new product is established, the Group Insurance Product for Occupational Retirement (OAPES), which will be issued by insurance companies and will provide protection of the rights of the insured equivalent to TEA programs.
Third axis: Strengthening the protection of the insured
The bill provides for the full portability of the rights of the insured, so that a change of job or professional status does not lead to the loss or weakening of vested rights, the ministry says. Also, a horizontal strengthening of transparency is introduced with obligations to register OAPES in a public registry, rules for proper distribution of the product, prevention of conflicts of interest and an obligation to periodically inform the insured about the progress of their investments.
Finally, protection of the unemployed is ensured with the possibility of remaining in occupational insurance, the upgrading of the investment framework of providers and the right of the insured to information.
The new framework for occupational insurance brings significant benefits for all those involved. For the insured, it strengthens pension income, facilitates access to supplementary protection, guarantees the portability of rights, protects self-employed professionals and provides greater transparency.
For businesses, it constitutes an incentive for attracting and retaining employees, provides the possibility of an employer benefit through a collective agreement, strengthens employer branding and corporate social responsibility, allows the management of investment capital and makes the framework functional for smaller businesses.
For the economy, it accumulates investment capital, channels liquidity into the market by preventing capital flight, strengthens long-term household savings, creates new jobs in the financial sector and utilizes the institution to strengthen pension adequacy.