Who are insured with parallel insurance in IKA, OAEE and other former Funds may receive two repayable sections or an increase in pension. What applies before and after 2017.
Thousands persons who previously paid contributions to two different Funds at the same time they can see parallel insurance time significantly increasing their pension. The result, however, is not the same for all: in some cases two repayable sections arise, while in others an increase in pension is paid.
The parallel insurance is one of the most complex chapters in the calculation of pensions and concerns mainly workers who for some years of their working life also paid contributions to more insurance institutions.
A typical case is an employee who was employed and was insured in the former IKA, while at the same time maintaining an individual undertaking or a free profession and paid contributions to the former IKAEE.
These contributions are not lost. However, the way in which they are converted into pension benefits depends mainly on two factors: how much insurance time has been collected in each former Fund and if self-fulfilled the conditions for retirement in each of them.
When two repayable pension sections can arise
The basic point to be made by the insured persons is that the term «double pension» can easily create the wrong impression.
The existence of insurancee two former Funds does not automatically mean that a pensioner will receive two full main pensions and, in particular, two full national pensions.
Where the insured person fulfils the pension requirements of both former institutions, the calculation may lead to a national pension and two repayable sections, depending on the insurance time and contributions paid.
THE e-EFCA itself declares, in cases of cumulation of pensions of the same category, that different methods of calculation are considered, including the payment of a national pension together with two repayable pensions. The aim is to obtain the most advantageous amount for the insured person.
Example with IKA and AIF
An insured person may, for example, have worked for several years as an employed person with insurance in the former IKA and at the same time engaged in a professional activity under an insurance obligation in the former AIF.
For the same calendar years contributions were therefore paid to both operators.
If the time completed to each person is sufficient to establish an autonomous pension entitlement, the contributions paid may lead to the calculation of separate repayable parts.
The exact result is not the same in each file as it is affected by the total insurance time, pensionable earnings, the amount of contributions and the conditions applicable to each former entity.
What happens when there is only one Fund pension entitlement
Even more important is the case in which the employee had paid contributions to two Funds, but ultimately he only founded a pension entitlement on one of the two former bodies.
The insurance period of the second Fund shall not be deleted or unused.
For a parallel insurance period until 31 December 2016, which has not been used to establish the pension entitlement, an increase in pension is envisaged because of the additional contributions paid.
The e-EFCA notes that the parallel time not used for the foundation is taken into account to increase the amount of pension under Article 36A of Law 4387/2016, as added by Law 4670/2020.
How the increase is calculated
The mechanism of the increase is of particular importance for insured persons with many years of simultaneous payment of contributions.
For each year for which an additional contribution has been paid, an annual payment rate of 0,075% shall be provided for each percentage point of an additional contribution.
The calculation shall take into account the basis on which the additional insurance contribution was paid.
In practice this means that the benefit is not a single fixed amount for everyone. It depends, inter alia, on:
- the years of parallel insurance,
- the amount of the additional levy;
- the remuneration or the basis on which the contributions were calculated,
- whether or not this time is used to establish a pension entitlement.
The longer the period for which additional contributions were paid, the greater their impact on the final amount may be.
The critical limit of 1 January 2017
The limit date for parallel insurance is 1 January 2017, when the operation of the EPCA began.
Years before and after that date are not treated the same way.
For time up to 31 December 2016 there are distinct insurance times in the former entities, such as IKA, AIF and others.
From 1 January 2017 onwards, the periods for which more has been paid a single insurance period is treated, for the main pension, as a single insurance year. This is explicitly specified by e-EFKA.
Therefore, two parallel activities within the same year after 2017 do not mean that the insured person acquires two years of insurance for the same 12-month period.
Time measures once, while rules on contributions and pension calculation are applied on the basis of the new single insurance framework.
Three different versions that e-EFKA can consider
According to the entity’s instructions, where the required conditions exist in more former insurance institutions, different scenarios can be considered in the calculation.
Indicative:
- A national and a contributory pension from one former institution, with an increase in the time of the second institution.
- The inverse calculation, i.e. the use of the other former body for the repayable pension and an increase for the former.
- A national pension and two repayable pensions where the relevant conditions are met.
The e-EFCA provides that the most advantageous amount resulting from the calculations provided for is granted.
It is not enough just to exist «two Funds»
The The main conclusion is that the older insurance in two institutions alone is not enough to create two self-employed pensions.
What needs to be checked in the insurance file is whether there is sufficient time for an independent right foundation in each former Fund.
If there is, the mechanism can be activated Even leads to a national pension and two repayable sections.
If there is no second stand-alone right, the additional contributions paid by the end of 2016 may, under the conditions laid down, strengthen the amount through the increase.
What insured persons should check
Those who have a history of parallel insurance, particularly in combinations such as IKA-EAE, are useful before the pension application to know accurately:
- how much time has been recorded in each former entity by 2016,
- what intervals were really parallel,
- if there are periods that have not been properly spent in insurance history,
- if an autonomous right is founded on more than one entity;
- which contributions have been paid for the parallel time.
The This detail can be decisive, as two insured persons with the same total number of years of work may result in a different amount of pension depending on when, where and at what amount of contributions were insured.
