Greece Changes Retirement Age to Cut Pension Costs

Labour Minister Andreas Loverdos said both men and women will retire at 63 on average, according to the AFP. The maximum retirement rate is currently 65 for men and 60 for women, and Greece is under pressure by the European Union to bridge the gap, the news report said.

The change will be fully in effect by 2015, Loverdos told reporters.

The minister also pledged to bring an end to voluntary retirement schemes. The pension reform is part of a cost-cutting plan by Greece’s hard-pressed Socialist government which is struggling to slash a debt mountain expected to hit over 290 billion euros ($396 billion) this year.

Loverdos is trying to save 4.5 billion euros this year from a social budget burdened by years of mismanaged spending by social funds on medicine and hospital bills, the news service said.

Greece’s main private sector union GSEE is staging a nationwide strike on February 24 in opposition to the pension reform. Thousands of civil servants targeted for bonus cuts are holding another one-day strike on Wednesday.

Greece’s 12.7% deficit is beyond European Union limits of 3% of output for eurozone members, and it suffered a triple downgrade of its sovereign debt in December.

The European Commission last month approved a three-year Greek crisis plan presented by the government, but the European Union executive arm also placed Greece under a permanent system of monitoring — a first for the EU — and chastised Athens over faulty budgetary data tabled by the previous conservative government ousted in October.