The government is preparing a historic reform for workers’ lump-sum retirement payouts, with the abolition of the Katrougalos Law expected to take effect from 2027. The announcement of this major overhaul is anticipated at the Thessaloniki International Fair opening ceremony by the Prime Minister, with the goal of eliminating the inequalities faced by thousands of professionals upon retirement. The end of the Katrougalos Law on lump-sum payouts marks a new era of fairness for workers.
Why the Katrougalos Law on lump-sum payouts is being abolished
The current system creates enormous injustices, particularly for younger workers who receive only the contributions they paid throughout their professional careers. The dual calculation system in use today is divided into two distinct components, generating significant inequalities.
The first component covers years of insurance up to 2013, calculated at 60% of the average earnings from the best five-year period between 2009 and 2013. The second component covers the period from 2014 onwards and is not fully contribution-based. This change has caused a gradual reduction in payout amounts, as a significant portion of the lump sum has been converted into an interest-free refund of contributions paid.
Estimates indicate that the overall reduction reaches 23% compared to the previous system. Losses become even greater for those who are further removed in time from the critical 2009–2013 period. The end of the Katrougalos Law on lump-sum payouts is set to correct these distortions.
The proposed changes that will bring higher payouts
The proposals currently under discussion — set to be finalized by August — include a radical revision of the calculation method. The central change provides for an extension of the 2009–2013 five-year reference period, used to determine the more favorable component of the benefit, so that it more closely aligns with the actual retirement age.
At the same time, a new calculation method is being examined for those retiring after 2026, creating a more balanced framework. The changes aim to reduce inequalities and strengthen fairness for all retirees. The economic team is seeking to create a stable and equitable system that will redress existing disparities.
Lump-sum payout amounts by sector
According to official data from EFKA (the Unified Social Security Entity), lump-sum payouts show significant variation depending on the employment sector. In the public sector, civil servants receive an average of €24,600, with a marginal decrease compared to 2025. Municipal employees under TADKY receive €21,200, recording an increase of €960.
Security forces show an average lump-sum payout of €24,500 in the first two months of 2026, with an impressive increase of €11,000. Teachers also receive €24,500, although a significant reduction has been recorded. Employees on special pay scales — such as university professors, NHS doctors, diplomats, and judiciary staff — receive an average of €40,100, reflecting a decrease of €2,000.
Public hospital employees on waiting lists receive an average of €23,226, down by €3,103 from 2025.
Lump-sum payouts in public enterprises and organizations
OSE (Greek Railways) retirees top the list with a lump-sum payout of €103,000, up by €30,000. They are followed by OTE (Hellenic Telecommunications) retirees with €52,300, recording an increase of €10,000. DEI (Public Power Corporation) pays an average lump sum of €44,000, down by €5,500 compared to 2025.
ERT (Greek public broadcaster) retirees receive €11,751, reflecting a drastic reduction of €25,807. Former Commercial Bank employees receive €39,646, with an increase of €32,270, while former Ionian Bank employees receive €46,600, up by €7,000.
At the Thessaloniki Port Authority, the average amount stands at €50,000, while at the Piraeus Port Authority it reaches €35,000, with an increase of €27,000.
Lump-sum payouts for professionals and the self-employed
Among professional pension funds, notaries receive the highest average lump-sum payout, standing at €24,658, despite a reduction of €5,900. Athens lawyers receive €17,500, down by €1,200 from 2025.
Doctors receive an average lump sum of €4,700, up by €650, while engineers receive €8,828. Amounts across the various private-sector welfare funds show considerable variation.
Despite the increases recorded in the public sector and public enterprises, the amounts remain significantly lower than the lump-sum payouts granted before the calculation method was changed in 2016. The end of the Katrougalos Law on lump-sum payouts is expected to change this situation.
Deductions and withholdings from lump-sum payouts
The lump-sum benefit is paid in full without deductions. Exceptions apply in cases where tax debts exist, in which case up to 50% of the benefit may be withheld. Amounts are also withheld in the case of a loan from the Deposits and Loans Fund in accordance with the relevant contract, as well as in cases of outstanding contribution debts to e-EFKA.
