Greek Auxiliary Pension Fund Reform: Rationale, Institutional Design, and Early Implementation Challenges

The 2021 reform of Greece’s auxiliary pension system introduced a publicly managed, capitalized pillar known as the Hellenic Auxiliary Pensions Defined Contributions Fund (TEKA). Implemented in response to demographic ageing, fiscal vulnerability, and institutional fragmentation, the reform marked a structural departure from the pay-as-you-go logic of the Greek pension landscape. TEKA operates through individual accounts, employs life-cycle investment strategies, and is backed by a state guarantee that ensures a minimum pension floor. This study adopts a qualitative, policy-oriented approach, drawing on legislative texts, actuarial projections, administrative data, and international pension reform literature. It finds that TEKA offers a cautious yet meaningful diversification of the Greek pension system, aligning with European trends while maintaining public-sector control and digital governance. Early challenges include limited publicly disaggregated reporting on voluntary uptake and fiscal transition flows, and the political risk of future reversals. Comparative insights from Sweden, Poland, and Latvia highlight the importance of regulatory coherence and institutional trust in sustaining capitalized schemes. The analysis contributes to broader debates on pension governance, intergenerational equity, and systemic adaptation in ageing societies, illustrating how partial capitalization can coexist with social insurance principles in a constrained fiscal environment.