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Thursday, January 26, 2023
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GreeceFund of young people's auxiliary pensions has already accumulated 20 mln euros,...

Fund of young people’s auxiliary pensions has already accumulated 20 mln euros, ministry says

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The investment fund set up for young people’s supplementary pension income (TEKA) through their contributions has already enrolled 145,000 employees and 65,000 employers, according to the latest available figures from the Labor & Social Affairs Ministry.

The Hellenic Auxiliary Pensions Defined Contributions Fund has already exceeded targets and is now managing 20 million euros, the ministry said. Registrations of employees and employers began in January 2022, and funds are collected through the electronic services of the national social security agency (e-EFKA).

Aimed at ensuring younger people get auxiliary pensions, TEKA is a legal body governed by public law and is responsible for investing the contributions. The capital, comprising the accumulated contributions, is invested and the returns are once again credited to each insured person’s individual account.

At the end of a person’s work life, the accumulated capital (the sum of the contributions and returns), translates into a life-long monthly auxiliary pension. The new system also provides for disability and survivor’s pensions, while the individual contributions are guaranteed by the state.

TEKA was set up for people born after January 1, 2004 and for those entering the labor market for the first time. Those eligible include applicants who are not obliged to have a supplementary pension, wage-earners or freelance workers, and applicants who are no more than 35 years of age.

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Individuals who were enrolled in the supplementary insurance of e-EFKA (former ETEAEP) and were born on or after January 1, 1987 may also enroll in TEKA.

The fund’s investing policy will follow three stages: a) contributions will be invested in low-risk funds, b) insured people will be offered a default portfolio with a wider and differentiated portfolio of funds (this will last until the end of 2024), and c) the portfolios will be risk-differentiated depending on the employee’s age (as of 2025 and later). At this stage, individuals will also have an opportunity to choose their own risk level.

SOURCE; ANA-MPA

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