info:eu-repo/semantics/article International Social Security Review 76(1) Altiparmakov, Nikola https://phaidrabg.bg.ac.rs/o:32511 doi:10.1111/issr.12317 ISSN: 0020-871X 2023 eng The 2022 Greek pension reform : The rebirth of carve-out privatization in Eastern Europe application/pdf 357740 bytes All rights reserved Keywords: pension scheme, defined contribution plan, social security reform, social security financing, social security administration, Greece Abstract: After a decade of unprecedented austerity, Greece abruptly changed the course of pension consolidation in 2022 and implemented the controversial carve-out pension funding approach, whereby a portion of existing pay-as-you-go (PAYG) contributions are diverted to fund individual pension savings, thus undermining the financing of existing PAYG pensions. Although inspired by the World Bank’s 1994 pension privatization blueprint, the Greek 2022 reform features a major policy shift by entrusting the management of individual pension savings to a dedicated government body, ostensibly to try to remedy inherent market failures in private pension provision. Like earlier reforms in Eastern Europe, the multi-decade transition costs of carve-out funding have been vastly underestimated in Greece, which will give rise to fiscal distress in the coming years when annual transition costs become sizeable and favourable international financing terms start to change. Unless firm political commitment is established to implement the measures necessary to finance the transition costs, Greece may have to resort to reform reversals similar to those already implemented across Eastern Europe.