K. Mitsotakis with young people about TEKA: It is a reform for the new generation

“I am glad that we are having this discussion with the real beneficiaries of this reform. I will focus on the most important aspect, the temptation of the young person to participate in a scheme of undeclared work or partially insured work. Today with the system we have at our disposal any young person who works for even an hour uninsured will know that they are missing out on contributions that will allow them to have a much better supplementary pension than they would otherwise have.This will put pressure on this reality that exists to begin to change because we have a framework of incentives and disincentives. At first the amounts will seem small but after some time they will be much larger. Their basic contributions are essentially guaranteed,” Kyriakos Mitsotakis emphasized in a discussion with young men and women as part of his presentation Fund of Auxiliary Capitalization Insurance.

“All insurance systems face the problem that workers are constantly decreasing and there are fewer redistributable resources. The new system generates resources that belong to the insured themselves. This has a transitional cost that the state is willing to take on,” noted the prime minister .

Iro Rigou, 23 years old, mentioned that as a student she worked uninsured in catering. “It was my responsibility and a huge mistake as I lost some benefits during the coronavirus period. I felt invisible,” he said, while Antonia Konstantopoulou emphasized that “this reform was necessary.” “What I liked is that there will be an application where I will be able to see how much money is collected from my salary and I will have some control over the investments that will be made,” said Thanos Paraskevas while 19-year-old Christos Constantatos who is insured at TEKA referred to the transparency of the new system. “Because I’m 19 years old, I don’t know how pensions work. It’s important to have a medium that gives me information. I’m not at all familiar with the concept of investments,” he said.

“We are educating a new generation on the concept of saving. Pension is a mandatory form of saving. Being able to have a better idea of ​​how this money will be invested and being willing to take the risk of the markets with the guarantee that your money will not are lost,” said Kyriakos Mitsotakis, who also spoke about digital transparency. “We have the ability to have digital platforms and to be able to provide real time information which at the beginning will have an educational process. Then the amount will go up. It is important where this money goes, it is capital that can be invested back into Greek economy. Insurance funds abroad have enormous training know-how. We don’t want to get to the point where we have to cover losses from the fund with state resources,” noted the Prime Minister, emphasizing that the goal is “to succeed with the least risk, the greatest returns” .

Mr. Mitsotakis also said that at the moment such a system cannot be applied to primary insurance.

“We are making a start with the auxiliary. The main insurance contributions must be there to pay the pensions. I will insist on the most important element for me, which is the concept of the individual piggy bank” he added noting that “the young person himself will have a bigger interest not to work in the gray economy at all” and emphasized: “The logic that you can work fewer declared hours, get lower wages, we have to fight it because that way young people lose some money that is theirs”. “From 1.1.2023 when the system will be opened for everyone under 35 I am curious to see how many will enter”, he added.

Asked why this reform had not been done until now, he said that this question should be addressed to the previous governments and added:

“These reforms are not at all simple. We were captive to prejudices and ideologies that appeared in Parliament. The official opposition is diametrically opposed without being able to argue why it wants to deprive the highest pensions after 40 years. The insurance reforms have by their nature very long implementation horizons and in a political system that has learned to think only in terms of the next election cycle may not have been a priority. The changes that were made were imposed through adjustment memoranda. This is reform that was not forced upon us , we defended it and we implement it because we believe it is a reform for the new generation.You, even if you don’t think about it now, are making a choice that you will find in front of you on the bright side when the time comes to take your pension and at the same time you help the economy”.

Responding to a question for those who have reservations and ignorance about investments, Mr. Mitsotakis said that he considers it reasonable “to provide a two-hour seminar for someone who has no idea about investments, to educate an entire generation” and added: “The investment awareness and education around these issues doesn’t hurt. It’s a process of learning and managing the volatility of the markets. You have the ability to see the long horizon. Over time stock returns are positive, regardless of whether the markets always fluctuate “.

Source: AMPE