Greece undertakes a comprehensive reform of its occupational pension framework. The new Law 5327/2026 seeks to modernise the governance of occupational insurance, strengthen the rights of insured members and enhance portability. Occupational Pension Funds (“TEA”) become more flexible in the form of “Open TEA”, and Group Insurance Products for Occupational Pension (so-called “OAPES”) are introduced. Relevant tax benefits are gradually linked with contributions exclusively towards TEA and OAPES.
Open TEA and OAPES | Option of existing group pension plans for transition
An existing TEA may obtain authorisation from the competent authority to admit new sponsoring undertakings on an ongoing basis, without requiring the individual supervisory approval procedure otherwise applicable for each new sponsor under the existing TEA regime. In practice, this allows the TEA to operate as an “Open Occupational Pension Fund” (so-called Open TEA) making occupational pension more accessible.
A Group Insurance Product for Occupational Pension (“OAPES”) is a group pension product offered by insurance undertakings and registered in a dedicated public registry maintained by the Bank of Greece. The new framework covers registration and distribution, pre-contractual and post-contractual information and protection duties towards prospective members, members and beneficiaries, as well as organisational and governance requirements for providers.
Existing Group Pension Insurance Contracts (OASS) may transition into the new framework through two principal routes: the existing group pension programme may either be incorporated into an OAPES, subject to the conditions of the new regime, or be fully or partially transferred to a TEA, subject to approval by the competent authority and the applicable transfer requirements.
Minimum conditions for receipt of pension & supplementary benefits
The eligibility conditions that both TEA and OAPES must observe before a member can receive a pension-related benefit are set out in a unified framework, as follows:
for benefits paid with a view to retirement, the member must have started receiving an old-age pension from the main social security fund; and
for benefits paid with a view to awaiting retirement, the member must have reached the age of 55.
Alongside the core pension benefit, TEA and OAPES may provide “supplementary benefits” (with a death supplementary benefit being mandatory). These take one of the following forms:
Early redemption of the individual account – the early release, in part or in full, of a member’s accumulated rights before the minimum thresholds as described above are met; and
Additional cash benefits – lump-sum or periodic cash payments that are not linked to a member’s accumulated rights but instead represent additional insurance coverage.
All supplementary benefits are designed to address specific hardship events affecting a member or beneficiary, namely death, accident, disability, sickness or cessation/termination of the employment relationship. Focusing specifically on the last two cases, it is noted that:
A sickness-linked supplementary benefit may only take the form of an “additional cash benefit” payable exclusively to active members and to beneficiaries who have not been deregistered from the programme or to family members of active members;
A supplementary benefit linked to loss of employment may only be paid once the member has completed at least twelve continuous months of proven unemployment.
As per transitional provisions, for members and beneficiaries who, at the date of publication of the law, i.e. 28.08.2026, already existed under group pension insurance programmes in the process of being incorporated into an OAPES or under existing TEA, compliance with minimum conditions for receipt of a pension benefit or a supplementary benefit is not required. However, from that point onwards, the programmes may not be amended in respect of these members in a manner contrary to the new conditions.
Portability
The new law introduces a unified framework for the portability of pension rights between TEA and OAPES, with the aim of allowing members to preserve and transfer their occupational pension savings when changing employment.
A departing member with vested pension rights becomes a deferred beneficiary and retains those rights under the applicable dormant-rights regime. For departing members, the combined waiting and vesting period may not exceed three years and any minimum age requirement for vesting may not exceed 21 years.
A departing member who has not yet vested may receive back the contributions paid by or on behalf of that member. Where the member bears the investment risk, the amount payable corresponds to the lower of the nominal value and the accumulated investment value of those contributions.
A departing member with vested rights may transfer those rights to another TEA or OAPES operating in connection with the member’s new employment. The transfer service must be provided free of charge.
The transfer is initiated by the new provider upon the member’s request. The former provider must, within three months, calculate the value of the vested rights and transfer the corresponding amount or, where permitted, the relevant assets in kind. Once the transfer is completed, the former provider is released from any further obligation in relation to the transferred rights.
In addition to individual-level portability, the law permits the full or partial transfer of entire pension-benefit programmes between providers, subject to approval by the competent authority. Transfers are allowed from a TEA to an OAPES provider, from an OAPES provider to a TEA, and from an insurance undertaking operating a non-registered group pension product to a TEA. In each case, the transfer encompasses obligations, technical provisions and corresponding assets or equivalent cash amounts. Prior approval is required from the majority of the affected members and beneficiaries (or their representatives) and from the sponsoring undertaking. The competent authority assesses, among other things, whether the long-term interests of existing members and beneficiaries of both the transferring and receiving entities are adequately protected and whether individual rights remain at least equivalent after the transfer.
Tax amendments and transition
Increase in the maximum permitted limits on employer and employee contributions towards TEA and OAPES
The new limits apply for contributions as of 1 January 2027 and are increased:
from 20% to 35% of the gross salary, including taxable benefits in kind, for employees;
from EUR 20,000 to EUR 35,000 per year for self-employed individuals.
For individuals insured for the first time after reaching the age of 55, the previously applicable lower limits continue to apply.
Exemptions from payroll tax as regards:
Contributions paid by employees or employers to TEA and OAPES, provided they remain within the above applicable annual limits. Contributions towards OASS will enjoy the same exemption only up until 31.12.2027.
Additional cash benefits not linked to accumulated rights (within the above meaning) granted by TEA/OAPES.
New autonomous taxation rates applicable to OAPES pension benefits - transitional regime
As regards taxation of benefits, a transitional framework is established that results in a split into distinct periods for the taxation of amounts accumulated under group pension arrangements, as follows:
| Period | Key features |
| Period 1 Amounts accumulated from 01.01.20141 up to 31.12.2023 | -Favourable taxation is not linked to years of insurance but to the periodic vs lump-sum form of the benefit and its amount (EUR 40,000 threshold). -In case of “early redemption”, rates are increased by 50% (with specific carve-outs from the early redemption concept). |
| Period 2 Amounts accumulated from 01.01.2024 to 31.12.2026 | -Maximum limit of contributions introduced for the first time. -Favourable taxation is linked to years of insurance (the more years the lower the rate), periodic/lump-sum form of the benefit and adherence to the maximum limit. -In case of “early redemption” rates are increased by 50% (with specific carve-outs from the early redemption concept). -For individuals insured after age 55, rates increased by 5% for each year short of 5 years of insurance. |
1For amounts accumulated prior to that date the previous regime should be considered.
Period 3 | The new rates apply for amounts accumulated as of 01.01.2027 onwards
The new regime shifts from the Period 2 model and taxation is calculated based on the beneficiary’s age and the form of payment (subject to the new definition of a “periodic benefit”). More specifically:
-From the age of 62 up to and including the age of 67, a rate of 5% applies to periodic payments and 10% to lump-sum payments. The above rates also apply to benefits paid to members receiving an old-age pension from the main social security fund to the extent that they are over age 55.
-After the age of 67, the applicable rates are reduced to 2.5% for periodic payments and 5% for lump-sum payments.
-Pension benefits and supplementary benefits in the form of an early redemption of the individual account paid before the age of 62 are subject to the standard progressive payroll tax scale.
-A benefit that is 'paid periodically' means a benefit which is either paid for life and comprises fixed or increasing payments or is paid over a period of at least fifteen (15) years and comprises fixed or increasing payments, provided that any adjustments due to variations in investment returns take place in the final years. The periodic character of the benefit is not negated where the final settlement instalment of the total benefit shows a deviation.
New tax rates applicable to TEA pension benefits - transitional regime
The above new tax rates apply to benefits paid by TEA related to amounts accumulated as of 01.01.2027; for amounts accumulated before that date one needs to consider previously applicable regimes.
Taxation rates and regime applicable to benefits by mutual assistance funds [under article 6(20) of Law 3029/2002], remain the same
In contrast to the new age-based model, benefits paid by mutual assistance funds will continue to be taxed based on the number of years of insurance and the form of benefit payment with the same rates applicable. The early redemption “penalty” (increased rate by 50%) continues to apply.
What’s next
OASS transition deadline: insurers and employers currently maintaining OASS should plan the transition to OAPES or TEA before 31 December 2027. Failure to complete this process by that date will result in scheme members losing access to the preferential taxation regime from 1 January 2028. Early engagement with the Bank of Greece registry process is advisable as the timeframe is tight and practical difficulties may arise.
Minimum conditions for receipt of pension & supplementary benefits: Transitional provisions that shield members and beneficiaries from the newly unified minimum conditions for receipt of pension benefits are provided by the law. Clients with legacy schemes should monitor precisely which members and benefit terms fall within the scope of these carve-outs and enjoy protection.
Increased deductible contribution ceiling: HR and reward teams should revisit contribution funding levels considering the substantially increased 35% deductible contribution ceiling applicable from tax year 2027. The higher ceiling enhances the attractiveness of group pension arrangements as a remuneration planning tool.
Period-based tracking of accumulated amounts: Scheme administrators must implement systems to track accumulated amounts separately when benefits are paid, since each period has its own legal basis, rate structure, and key features.
Mutual Aid Fund arrangements: These are unaffected as regards taxation of benefits but should nonetheless be reviewed for the new, more generous contribution ceiling.
Further guidance is awaited from the Bank of Greece and the Independent Authority of Public Revenues. An update will be issued once the guidance is published.