If you read nothing else, read this … The state provides the bulk of retirement benefits, although supplementary pension schemes are springing up as salaries rise. While the state is seen as the main provider of retirement benefits, much of the bill is footed by employers. Private medical insurance (PMI) is one of the most popular employee benefits. Company cars tend to be provided to salesmen and managers, but are not particularly common.
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In Greece the state plays such a major role in providing for the nation, that benefits from employers are limited. David West, senior consultant, International Actuarial Practice at Aon, explains: “Flex is not big because there’s such a limited range of benefits. It’s probably not a sophisticated market, except for medical insurance.” Pensions are similarly limited due to heavy state provision. “Until recently, there was not a big market for private pensions since the state system was so generous,” says West. Peter Eyre, principal at Mercer Human Resource Consulting, agrees: “Traditionally, because the state has provided the bulk of retirement benefits, there has been no development in the retirement industry in Greece.” Employees accumulate benefits for each year of earnings based on a complex formula, subject to an earnings cap and revalued on an annual basis. But although pension benefits tend not to be provided directly by employers, the state retirement schemes are funded by hefty employer contributions. But, as Eyre explains, things are changing. “Earnings per employee have risen so much above the earnings cap to the point that they are more in line with those of Western Europe.” As a result, supplementary pension schemes have been introduced with a view to topping up retirement funds. These can be set up by employers and/or employees, providing they have more than 100 members, and are independently run. However, these changes are unpopular with the unions which have staged a number of strikes in protest. The most popular employee benefit in Greece by far is private medical insurance (PMI). State-provided medical services are generally poor, so PMI plans are supplemental to the basic healthcare provision from the state. “Typically, these schemes will cover both the employees and their dependants and will be paid for by both employee and employer,” says Eyre. But he adds: “They’re very expensive.” Other common perks include life assurance and some short-term sickness and disability benefits. Typically, sickness benefits are around 70% of pay, while disability benefits are usually integrated with social security and lump sum benefits. While not unheard of in Greece, benefits such as company cars and mobile phones are less common. Company cars tend to be provided to managers and sales staff. Some firms provide free internet access, computers and credit cards for senior employees. Benefits such as loans, both low and zero interest, and luncheon vouchers are tax effective. The provision of housing facilities by an employer can also be tax efficient, but it is primarily foreign companies and multinationals that make the most of the tax advantages and provide such benefits for their employees. For a company operating five days a week, holiday entitlement usually runs from 20 days annual paid leave for a minimum of 10 months’ service to 26 days after 10 years of service. For a company that operates six days a week, the minimum is usually 24 days rising to 30 days after 10 years’ service. Statutory holidays are in line with most of the rest of Europe, including Christmas and new year, for example. However, these also include Shrove Monday, Epiphany (6 January) and one public holiday that is unique to Greece, Oxi day on October 28. “Oxi” means “no” and the day celebrates General Ioannis Metaxas’ refusal in war-torn 1940 to allow Italian troops to enter Greece.