Greece received a financial bailout this week from the European Union and International Monetary Fund. A large part of the bailout comes from funds contributed by you, the taxpayers of the United States, through the monies committed to the IMF by President Obama. On Monday, Greece’s cabinet approved a sweeping overhaul of the country’s debt-ridden pension system. It is part of a package of austerity and reform measures designed to be implemented over the next three years.
The government is expected to introduce legislation to Parliament later this week. After debate, a vote is expected at the end of May. Legislation is expected to propose several changes, some of which are outlined below.
Pension reforms include a gradual raising of the minimum retirement age for early retirement to age 60. Plans are in effect for the general retirement age, to be lifted to age 65 after another 10 years.
Plans are in place to lower the pension benefits of wealthier retirees and experts warn that Greece’s pension system is facing possible bankruptcy. According to Labor Minister Andreas Loverdos, “The system faced collapse after 2011,” and “Inaction would have meant no pensions.”
Watch these legislative proposals carefully as they may provide insight into what will be coming to America’s Social Security program in the intervening years.